Should a Startup Buy D&O Insurance After Fundraising?
Yes, if the round adds outside investors or board seats; if you already have D&O, review it so the new directors, entities and required limits are covered.
Yes, if the round adds outside investors or board seats and you don't have D&O yet. If you already carry it, review the policy after closing so it matches what the round changed.
Tell your insurer or broker about the round, then compare the policy with the signed financing documents. Check that new directors and any new entities fall within the policy's insured definitions, and that the limit meets what investors asked for. If the requirement is for a specific Side A, B or C limit, check whether the sides share one aggregate or whether securities claims carry a sublimit.
Report any dispute, demand or circumstance you already know about before the new policy period starts. Prior-notice and pending-litigation exclusions can stop a fresh policy from responding to it. Any change you asked for should appear in an endorsement, not just in an email from your broker.
