Earnings season has a way of triggering lawsuits.
When companies report results shareholders don’t like, class actions and derivative suits often follow.
Whether your company is public, private, PE-backed, or venture-backed, Directors & Officers (D&O) insurance is one of the most critical lines of coverage for any business. But many programs fail when they’re needed most.
Use this 2026 checklist to stress-test your D&O coverage before the claim hits.
🔍 The 2026 D&O Insurance Checklist
1️⃣ Does the policy actually cover what your company does?
– Review business activity exclusions carefully
– Confirm coverage aligns with:
- Your current operations (not last year’s)
- New products, services, or markets
- M&A, spin-offs, restructurings, or capital raises
– Watch for exclusions that quietly eliminate:
- Core revenue activities
- Emerging or tech-enabled operations
2️⃣ Are claim reporting deadlines realistic in the real world?
– Identify whether the policy is claims-made (most D&O policies are), claims-made-and-reported, or something different
– Confirm:
- How a “claim” is defined (lawsuit, demand letter, subpoena, investigation)
- The outer limit for reporting after policy expiration
– Ensure internal teams know:
- Who reports claims
- How fast notice must be given
3️⃣ Are defense costs paid immediately?
– Confirm the policy provides advancement of defense costs
– Ensure:
- No requirement for final adjudication before payment
- No unreasonable reimbursement clawbacks
4️⃣ Who controls the defense—and does that matter?
- Determine whether the insured selects counsel or the insurer imposes panel counsel
- Review consent-to-settle provisions, hammer clauses, and cooperation requirements
5️⃣ Are Side A, B, and C limits structured correctly?
– Confirm:
- Adequate Side A protection for individuals
- Entity coverage (Side C) does not exhaust limits too early
– Evaluate:
- Dedicated Side A towers
- Bankruptcy and insolvency scenarios
6️⃣ Have recent legal and regulatory trends been factored in?
- Securities enforcement activity
- ESG-related disclosures
- Cyber-related derivative suits
- AI, data, and privacy governance claims
🧠 Bottom Line
D&O insurance is personal asset protection for leadership and balance-sheet protection for the company.
If your program hasn’t been reviewed recently by someone who handles D&O claims and litigation, now is the time.
📌 The best moment to fix your D&O insurance is before earnings season, not after the lawsuit is filed.