Insurance Curator Selecting the right broker for Directors & Officers (D&O) liability insurance is a commercial decision that materially affects coverage, price, and board-level protections. This guide — focused on the United States market (New York, California, Texas, Illinois and other major commercial hubs) — walks you through how to evaluate brokers, what to ask, pricing expectations, and practical placement strategies to secure competitive terms.
Why broker selection matters for D&O placements
D&O is complex: underwriting is highly fact-specific, market capacity shifts quickly, and claims experience (and cyber/linkage) heavily influence terms. A broker does more than find price — they:
- Build a clear submission and narrative for underwriters
- Cultivate carrier competition and access to capacity
- Negotiate policy wording, retentions and side A/B limits
- Advise on program structures (single carrier vs. multi‑carrier towers)
- Manage renewals and claims advocacy
The wrong broker can mean weak wording, missed underwriting credit, or paying materially higher premiums in competitive markets such as New York City, San Francisco, Los Angeles, Chicago, Houston or Dallas.
What to evaluate — a practical broker checklist
Use this checklist when interviewing brokers for a D&O placement:
- D&O specialization and track record
- Years of D&O focus and sample placements in your industry.
- Carrier relationships & market reach
- Access to top D&O carriers (e.g., Chubb, AIG, AXIS, Travelers, Beazley).
- Underwriting intelligence
- Ability to present loss trends, governance frameworks and remediation plans.
- Placement strategy & creativity
- Experience with multi-carrier towers, layered programs, Side A-only or difference-in-conditions structures.
- Claims advocacy & service model
- Claims team size, standard SLAs and examples of recent claims advocacy.
- Fee structure & transparency
- Commission vs. fee-based engagement and any additional service charges.
- Local presence for regulatory/board support
- Office coverage in relevant states (NY, CA, TX, IL) for board engagements and legal connectivity.
Key questions to ask brokers in the RFP / interview
- Who will lead the submission and who is the day-to-day contact?
- Which underwriters have you placed D&O with in the past 24 months?
- Can you show three comparable placements (industry, revenue band, region)?
- What is your recommended program structure for our risk: single carrier or tower?
- How will you position any prior claims or sensitive exposures to avoid flat cancellations or coverage gaps?
- How do you quantify and explain D&O pricing drivers to our board?
If you need a formal RFP, follow best practices described in How to Prepare an Effective RFP for Directors and Officers (D&O) Liability Insurance Renewals.
Pricing expectations — US market benchmarks (by company size)
D&O premiums vary dramatically by size, public vs. private, industry and claims history. Use these ranges as market-oriented benchmarks:
| Company Profile | Typical Annual D&O Premium (US market) | Typical Limit Examples |
|---|---|---|
| Small private business (revenue < $10M) | $1,500 – $5,000 (1M/1M limit common) | $1M / $1M |
| Lower middle-market (revenue $10M–$100M) | $25,000 – $150,000 | $5M – $10M aggregate |
| Upper middle-market (revenue $100M–$500M) | $150,000 – $500,000+ | $10M – $25M aggregate |
| Public / large cap | $500,000 – $10M+ (programs often >$1M) | $25M+ program limits, layered carriers |
Sources: Forbes Advisor (small business averages) and Marsh market commentary on D&O trends and program costs. See Forbes Advisor for small-business D&O averages: https://www.forbes.com/advisor/business-insurance/directors-and-officers-insurance-cost/ and Marsh market insights: https://www.marsh.com/us/insights/research/global-insurance-market-index-q3-2023.html
Note: These are general ranges. Specific carriers (Chubb, AIG, AXIS, Travelers, Beazley) may price higher or lower depending on appetite, retentions and industry. For example, a tech company in San Francisco with prior securities activity will pay materially more than a private services firm in Dallas with clean governance.
How top brokers win capacity and better pricing
Experienced D&O brokers use a combination of submission quality, timing, and competition:
- Superior underwriting presentations that include board governance materials, risk mitigation plans and incident timelines.
- Market timing: approaching markets when capacity is available (often Q4 for many carriers, but this varies). See timing guidance in Timing Your Purchase: When to Market Your Directors and Officers (D&O) Liability Insurance for Best Terms.
- Creating competitive tension—running multiple carriers in parallel or building a multi-carrier tower when lead capacity is constrained.
- Leveraging broker-carrier relationships and historical claims advocacy to secure favorable endorsements.
For deeper strategy on building competition and leveraging relationships, review How to Use Competition and Broker Relationships to Improve Directors and Officers (D&O) Liability Insurance Terms.
Broker fee models and negotiations
Brokers typically operate under one of these models:
- Commission-based: commission paid by carrier, which historically ranges 5–20% of premium depending on market and product.
- Fee-for-service: client pays an agreed flat or hourly fee, increasingly common for large or public placements to avoid perceived conflicts of interest.
- Hybrid: combination of reduced commission plus client fee.
Negotiate fee transparency and obtain written fee disclosure. For large public companies, expect a formal fee schedule and a detailed scope of work.
Location-specific considerations (NY, CA, TX, IL)
- New York (NYC): dense concentration of public companies and securities litigation risk — higher D&O sensitivity; carrier scrutiny around disclosures is intense.
- California (San Francisco/Los Angeles): tech and life sciences exposures; securities, privacy and class action risks increase pricing volatility.
- Texas (Houston/Dallas): energy and energy services exposures; claims linked to commodity cycles and governance in cyclical sectors.
- Illinois (Chicago): diversified industries — manufacturing, financial services; regional carriers may offer niche capacity.
Choose brokers with local insights and carrier relationships in these hubs; local counsel and loss-run access often shorten underwriting cycles.
Red flags when evaluating a broker
- Lack of D&O references or recent comparable placements.
- No clear placement strategy or reliance on a single carrier.
- Opaque fee or commission disclosures.
- Weak claims advocacy examples.
- Limited access to AM Best A-rated (or better) carriers for Side A capacity.
Final checklist before appointing a broker
- Obtain at least three comparable case studies and references.
- Require a documented placement strategy and proposed timeline.
- Ask for complete fee disclosure and any referral arrangements.
- Confirm claims handling and advocacy commitments in writing.
- Validate carrier access and expected primary vs. excess layering.
Sources & further reading
- Forbes Advisor — "How Much Does D&O Insurance Cost?": https://www.forbes.com/advisor/business-insurance/directors-and-officers-insurance-cost/
- Marsh — Global Insurance Market Index and market commentary: https://www.marsh.com/us/insights/research/global-insurance-market-index-q3-2023.html
- Insureon — D&O insurance cost guidance for small businesses: https://www.insureon.com/small-business-insurance/d-and-o-insurance/cost
Choosing the right broker for a D&O placement is a commercial negotiation as much as an insurance procurement exercise. Prioritize brokers who bring market access, forensic underwriting presentation skills, transparent fees, and local market intelligence for your US locations — and require demonstrable examples that their placements delivered better wording and pricing in comparable situations.