Does D&O Cover Investors?
Investors are usually claimants rather than insureds under D&O unless they also serve in a covered role or the policy grants entity coverage.
The distinction is between being an investor who brings a claim and an investor who also serves in an insured role.
A director-investor may receive Side A or B protection for covered conduct as a director, while Side C may protect the company for defined securities claims; neither automatically insures a shareholder in their investor capacity. Insured-versus-insured wording may affect disputes between the company and an insured investor. Check the investor’s role, the plaintiff and defendant definitions, securities-claim scope, and any derivative-claim exception. Do not promise an investor coverage based only on ownership or a financing document.
