Directors and Officers Insurance

Maryland Directors and Officers Liability Insurance

Protecting Your Business Leaders from Personal Risk

If you operate a business, nonprofit, or any kind of organization in Maryland, your directors and officers make critical decisions every day. But did you know that one bad decision—or even the perception of one—can lead to personal lawsuits against them? Directors and Officers (D&O) Liability Insurance is designed to shield your leadership team from these risks, and protect your business’s future.

In today’s increasingly litigious world, D&O coverage isn’t just for large corporations—it’s essential protection for Maryland businesses of all sizes. Let’s break down what D&O insurance is, why you need it, how to get it, and how much it costs.

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What Is Directors and Officers Liability Insurance?

Directors and Officers Liability Insurance is a specialized form of coverage that protects the personal assets of your company's leadership—such as executives, board members, and officers—if they are sued for decisions made while managing the company.

These lawsuits can arise from a wide range of claims, including:

Mismanagement of company assets
Breach of fiduciary duty
Employment practices (such as discrimination or wrongful termination)
Misrepresentation to investors, vendors, or customers
Regulatory violations
Negligence or failure to comply with corporate laws

Without D&O coverage, your leaders could be forced to pay out of pocket for legal defense, settlements, or judgments. Worse, these lawsuits can destabilize your organization—causing lost talent, damaged reputations, or even bankruptcy.

What’s Covered Under D&O Insurance?

Legal Defense Costs
Settlement Payments or Judgments
Claims from Employees, Investors, Customers, or Regulatory Bodies
Both Current and Past Directors and Officers

Coverage typically includes both the individual (when they are not indemnified by the company) and the company itself (when it indemnifies a leader).

Why Do I Need Directors and Officers Liability Insurance?

If you're running a business or nonprofit in Maryland, you face real exposure—regardless of your size or industry. Many Maryland organizations make the mistake of thinking D&O insurance is only for publicly traded companies. That’s far from true.

Here are some of the top reasons to secure D&O coverage:

1. You’re Making Big Decisions That Affect Others

Whether you're approving financial reports, making hiring decisions, or entering into contracts, your directors and officers can be held personally responsible for how those decisions impact stakeholders.

2. You Work With Investors, Donors, or Board Members

Shareholders and investors can sue for misrepresentation or financial mismanagement. Even nonprofits are at risk if donors or grantmakers believe funds were misused or improperly disclosed.

3. Employment Practices Claims Are Rising

Many D&O claims stem from employment-related issues like discrimination, harassment, or wrongful termination—often tied to leadership decisions. Even if you have EPLI (Employment Practices Liability Insurance), D&O coverage adds another vital layer.

4. Regulatory Scrutiny is Increasing

State and federal agencies have strict compliance expectations. A single investigation or fine can result in legal challenges against your leadership.

5. Attracting & Retaining Leadership Talent

Many executives and board members won’t agree to serve without knowing they’ll be protected from personal liability. D&O insurance signals professionalism, preparedness, and care for your leadership team.

In short, D&O insurance is peace of mind for everyone at the top.

How Do I Get Directors and Officers Liability Insurance in Maryland?

Getting D&O insurance is easier than you might think—especially when you work with a specialist who understands Maryland businesses and nonprofits. Here’s how the process works:

Step 1: Consult with a Local Insurance Advisor

A knowledgeable insurance advisor will assess your organization’s structure, risk exposure, industry, and goals. Maryland laws and local risk factors can influence your coverage needs, so working with someone familiar with the region is key.

Step 2: Fill Out a D&O Application

You’ll answer questions about:

The size and scope of your operations
Your company’s financials
Your leadership structure
Past or pending legal claims
Governance and compliance practices

This information helps underwriters evaluate your risk and price your policy accordingly.

Step 3: Receive and Compare Quotes

You'll receive quotes from one or more carriers, outlining:

Coverage limits (commonly $1M to $5M or more)
Retention (similar to a deductible)
Premiums (your annual cost)
Exclusions or limitations
Additional endorsements (like Side A Difference in Conditions)

Step 4: Select and Bind Your Policy

Once you choose your policy, your advisor will help you bind coverage, issue certificates, and keep you compliant moving forward.

Bonus tip: Bundle D&O with other executive liability coverages—like EPLI, fiduciary liability, or cyber liability—for savings and better protection.

How Much Does Directors and Officers Liability Insurance Cost?

D&O insurance pricing varies widely based on the size and nature of your business, your claims history, and the amount of coverage you need. That said, here are some average cost ranges to give you a general idea.

✅ Small Businesses or Nonprofits (under $5M revenue)

Annual Premium: $800 – $3,000
Coverage Limits: $1M – $2M
Retention: $1,000 – $5,000

✅ Mid-Sized Companies ($5M – $50M revenue)

Annual Premium: $3,000 – $10,000+
Coverage Limits: $2M – $5M+
Retention: $5,000 – $25,000

✅ Large or High-Risk Companies

Annual Premium: $15,000 – $100,000+
Coverage Limits: Custom
Retention: Varies depending on risk profile and past claims

Some factors that affect your premium:

Financial strength and creditworthiness
Industry (tech, finance, and healthcare often pay more)
Previous lawsuits or claims history
Number of directors and officers
Whether you’re publicly traded or private
Company growth stage (startups can be higher risk)

Good news? Even at the high end, D&O insurance often costs less than one hour of a legal defense team. It’s a smart investment in long-term stability.

Get Directors and Officers Liability Insurance in Maryland Today

Whether you're a startup founder, nonprofit executive, or established CEO, your leadership team faces serious personal risk—and you deserve protection. Directors and Officers Liability Insurance gives you the freedom to lead confidently, knowing you’re covered if the unexpected happens.

Ready to protect your leadership?

Contact me today!