Insurance Curator Directors & Officers (D&O) liability underwriting in the United States is a discipline driven by company profile, governance quality, financial strength, transactional activity, and claims history. Underwriters synthesize these inputs to price coverage, set retentions, and decide capacity. This checklist walks through the specific items carriers examine — and why they matter — with practical examples, typical premium ranges by company size, and links to market context and related underwriting topics.
Quick executive summary
- Underwriters prioritize financial stability, disclosure quality, governance structure, industry risk, and claims/litigation exposure.
- Premiums vary widely: small private companies often pay $3k–$25k annually for primary D&O layers; mid-market firms frequently see $25k–$250k; public companies commonly pay $250k to several million depending on revenue, industry, and securities exposure (see market sources below).
- Regional factors matter: companies headquartered in high-litigation jurisdictions (e.g., New York City, San Francisco Bay Area, and Chicago) usually face tighter underwriting and higher premiums.
(For market cycle context and pricing drivers, see Marsh and Aon reports cited at the end. For in-depth pricing drivers and benchmarking, see our internal resources: How Insurers Price Directors and Officers (D&O) Liability Insurance: Key Rating Drivers Explained, How Company Size and Transaction Activity Drive Directors and Officers (D&O) Liability Insurance Pricing.)
Underwriting checklist — item by item
1) Corporate profile and industry risk
- Company type: public, private, nonprofit, or subsidiary.
- Revenue band and profitability trend (3–5 year P&L and balance sheet history).
- Industry sector and loss frequency: life sciences, fintech, crypto, and social media typically attract higher scrutiny.
- Regulatory environment (e.g., regulated financial institutions, healthcare providers).
Why it matters: Industry and business model inform the probability of regulatory enforcement, securities litigation, or specialty claims.
2) Financial statements and capital structure
- Audited financial statements for the last 3 years; interim statements for current year.
- Cash flow, leverage ratios, working capital, and liquidity runway (especially for startups).
- Off-balance-sheet liabilities and contingent liabilities.
What underwriters do: Calculate debt-to-equity, interest coverage, EBITDA trends, and stress-test downside scenarios. Elevated volatility or weak liquidity increases retention and premium.
3) Governance, board composition, and controls
- Board makeup: independent directors, skills, diversity, committees (audit, compensation, risk).
- Executive succession plans and compensation structure.
- Presence and quality of internal controls, code of conduct, whistleblower policies.
Impact: Strong governance reduces underwriting risk; poor governance is a red flag. See also: Board Composition and Governance Scores That Lower Directors and Officers (D&O) Liability Insurance Costs.
4) Disclosure quality and financial volatility
- SEC filings (for public companies): timeliness, restatements, material weaknesses, auditor changes.
- For private companies: quality of investor reporting, frequency of restatements.
- Historical financial volatility and abnormal accounting practices.
Why: Weak disclosure or prior restatements materially increase securities-class-action risk and D&O exposure. See our deeper guide: Disclosure Quality and Financial Volatility: Underwriting Red Flags for Directors and Officers (D&O) Liability Insurance.
5) Claims history and litigation landscape
- Prior D&O claims (open and closed), settlements, defence cost patterns, indemnification paid.
- Pending shareholder suits, ERISA claims, employment practice claims, regulatory probes.
- Frequency, severity, and whether defence costs eroded limits historically.
Underwriting action: Claims history is one of the strongest predictors of near-term risk. See: Claims History and Loss Experience: How Past Suits Influence Directors and Officers (D&O) Liability Insurance Renewal Costs.
6) Transaction activity and M&A
- Recent or upcoming IPOs, acquisitions, divestitures, large financings, or distressed asset purchases.
- Earnouts, representations & warranties exposure, and escrow arrangements.
Why: M&A activity materially increases risk — newly created liabilities, purchase price disputes, and post-close suits drive higher premiums and sometimes carve-outs.
7) Employment practices and ERISA exposure
- Number of employees, key executive concentration, prior EPL claims.
- Pension plan underfunding and fiduciary exposure.
Employment claims frequently trigger D&O/Entity exposures — carriers often request EPL & Fiduciary loss runs.
8) Policy structure, limits, retentions, and attachments
- Requested limit, Side A vs. Side B vs. Side C coverage needs.
- Retention (deductible) level and how much the company will self-insure.
- Excess tower capacity and insurer appetite for Side C (securities) risk.
Pricing is sensitive to limit requested and willingness to accept larger retentions.
9) Controls over third-party risks (cyber, vendor exposures)
- Cyber incident history, vendor concentration, indemnity agreements.
- Overlap with cyber liability and regulatory compliance programs.
Cyber incidents often cascade into regulatory and securities suits — carriers evaluate overlap to avoid duplicated or uncovered exposures.
10) Jurisdictional exposure and venue
- Litigation jurisdictions and forum selection in contracts.
- State law risks (e.g., Delaware corporate law exposure vs. other states).
High-risk jurisdictions and unfavorable venue selection increase defence costs and potential damages.
Typical premium ranges (U.S.) — by company size
Note: These are representative market ranges for primary D&O layers (non-indemnified Side A and company indemnified Side B/C) as observed in U.S. markets during recent hard/soft cycles; actual pricing depends on underwriting factors above.
| Company profile | Typical primary limit requested | Representative annual premium range (US) |
|---|---|---|
| Small private (rev < $10M) | $1M–$5M | $3,000 – $25,000 |
| Lower mid-market (rev $10M–$100M) | $5M–$25M | $25,000 – $150,000 |
| Upper mid-market (rev $100M–$1B) | $10M–$50M+ | $75,000 – $500,000 |
| Public companies (varies by float & sector) | $10M – $100M+ | $250,000 – $multi‑million |
Sources and market context: Marsh and Aon have documented persistent upward pricing pressure during hard market periods — public-company D&O rate increases averaged in the multiple‑tens of percent in peak hard markets (see Marsh and Aon links below). Regional hubs with high litigation activity (New York City, San Francisco) trend toward the upper end of these ranges.
How specific carriers & broker actions affect pricing
- Large D&O markets in the U.S. include carriers such as Chubb, AIG, Travelers, CNA, Zurich, and Berkshire Hathaway. Each carrier applies distinct appetite and tiered capacity; for example:
- Chubb and AIG are active writers across public/private segments and often provide higher-limit towers for public companies.
- Travelers and CNA have strong middle-market programs and affinity with private-company risk profiles.
- Brokers can negotiate terms, aggregate carrier capacity, and present governance improvements to reduce pricing — see: Negotiating Pricing: What Brokers Can Do to Improve Directors and Officers (D&O) Liability Insurance Terms.
Example carrier pricing signals (illustrative):
- Chubb: known to write $1M primary D&O for private companies often starting in the mid‑thousands depending on industry and loss runs.
- AIG: competitive across public markets; mid‑market $10M tower placements frequently involve AIG as lead or co-participant.
(These examples are illustrative; request competitive quotes for firm-specific pricing.)
Documentation to prepare for underwriting submission
- Last 3 years audited financials + current interim statements
- Cap table and debt schedule
- Board roster, committee charters, and director resumes
- Prior D&O/EPL/Fiduciary loss runs (5–7 years)
- SEC filings, investor presentations, press releases for material events
- Details on M&A, capital raises, or regulatory inquiries
Final notes on market cycles and strategy
D&O pricing and capacity are strongly cyclical. During hard markets carriers trim capacity and raise rates; in soft markets prices moderate and capacity expands. Review market intelligence before renewing and consider governance remediation to materially improve terms. For broader market-cycle guidance, see: Market Cycles and Capacity: How Hard and Soft Markets Impact Directors and Officers (D&O) Liability Insurance Rates.
Selected external references
- Marsh — Global Insurance Market Index and D&O commentary: https://www.marsh.com/us/insights/research/global-insurance-market-index.html
- Aon — D&O insurance insights and market updates: https://www.aon.com/home/insights/insurance/d-and-o-insurance.jsp
- Insurance Journal — articles on D&O market trends and rate movement (U.S. focus): https://www.insurancejournal.com/topics/directors-officers/
For tailored underwriting checklists or a benchmarking quote for New York City, San Francisco, Chicago, or other U.S. locations, prepare the items listed in "Documentation to prepare" and engage a broker experienced in D&O placements.