Should a Startup Buy D&O Insurance After Fundraising?

Funding can add investors, board seats, governance promises, and new company information that affect underwriting and the policy’s fit. Triple-I says investors often require D&O before they invest, so review the financing documents for requirements that already applied at closing. A newly purchased policy may not cover claims or circumstances known before its effective date, and prior-notice exclusions can matter. Tell the broker about the completed financing and any demands or disputes, then confirm the insured entities, retroactive date, continuity, and whether the investor’s requested coverage is actually shown in the issued policy.

After closing, update the insurer or broker with material changes and compare the policy against the completed financing documents. New directors or investor rights do not automatically amend the insured-person definition or add entities. Side A/B/C limits may also be affected by shared aggregates or a securities-claim sublimit. Check whether any dispute, demand, or circumstance was reported before the new policy period, since prior-notice and pending-litigation terms can prevent a fresh policy from responding. Confirm the policy is bound, the effective date is correct, and requested amendments appear in an endorsement rather than only in correspondence.