Directors and Officers Insurance Cost: Average Rates & What Drives Them

Directors and officers insurance, usually called D&O, protects the people who run a company when someone sues over their decisions. A shareholder, an employee, a regulator, or a competitor can name a board member personally, and the legal bills arrive long before any outcome. A D&O policy is meant to pay defense costs and certain settlements so that the individuals do not carry them.

Pricing follows how much a company's decisions could cost others. This guide uses Insureon's customer data, with a check date of Oct 14, 2026, plus a NerdWallet rule of thumb for coverage amounts.

Insureon breaks its median down by industry. The pattern follows how much a board's decisions can move the company's finances.

Retailers sit at the low end. Boards in distribution and technology make larger bets with more money at stake, and Insureon's figures for those industries are several times higher.

The headline median hides a very wide spread. Insureon says its small business customers pay from $525/yr to over $12,000/yr for the year, depending on their risks. That is a difference of more than twentyfold between the low and high ends, and it is why no single average can predict your own quote.

NerdWallet cites an industry rule of thumb that coverage costs $5,000/yr to $10,000/yr for every 1 million of limit, according to a broker it names. Treat that as a rough ratio for larger limits, not as a price for a small policy.

The table below lists Insureon's median next to NerdWallet's. NerdWallet's page attributes its monthly figure to Insureon, and it reflects an older version of the same dataset. The two rows are one source reported twice, not a second opinion.

• Industry risk, as the table above shows
• Coverage limits and the deductible, called a retention
• Number of directors and employees
• Annual revenue and financial strength
• Claims history and governance practices
• Whether the company has outside investors, which can raise exposure
• Location

Nonprofits and private companies often buy D&O too. For a nonprofit, board members are volunteers, and the policy can matter for recruiting them.

Many businesses first look at D&O when they take outside investment, bring on an independent director, form a nonprofit board, or sign a contract that asks for proof of coverage. A founder running a small company alone is often less exposed than a firm with several directors, investors, and employees, though a lawsuit can still name an individual officer. Premiums often reflect that, which is part of why the Insureon range starts so low.

Policies are usually written on a claims-made basis, meaning the claim has to be made while the policy is active. Ask how past acts and a lapse in coverage are handled before you switch carriers.

D&O is not a replacement for general liability, which covers injuries and property damage, or professional liability, which covers mistakes in services. Employment claims, such as discrimination or wrongful termination, are often handled by employment practices liability coverage, which some carriers bundle with D&O in a management liability package. Ask which claims are in and out of each policy. A licensed insurance agent or broker can explain how the pieces fit together.