The ACORD 59 Directors and Officers Application is used to apply for D&O liability insurance — coverage that protects the personal assets of a company's directors, officers, and managers against claims alleging wrongful acts in their management capacity. D&O is not just for large corporations. Private companies, nonprofits, and small businesses with boards or investors all have D&O exposure.
D&O coverage is needed for: • Private companies with outside investors, lenders, or minority shareholders • Nonprofit organizations with boards of directors • Companies seeking venture capital or private equity investment • Businesses undergoing a merger, acquisition, or significant restructuring • Companies with independent contractors or advisory boards who have management authority • Any organization where directors or officers could face personal liability for management decisions
D&O policies typically include three coverage parts:
Side A — Direct coverage for individual directors and officers when the company cannot or will not indemnify them. This is the most critical coverage — it protects the personal assets of executives.
Side B — Reimbursement to the company when it has advanced defense costs or indemnified directors and officers against covered claims.
Side C — Entity coverage for the company itself. For private companies, Side C typically covers securities claims. For nonprofits, it covers organization liability.
Side A coverage is the foundation — if an individual director faces a claim and the company refuses to indemnify or is insolvent, Side A is what protects that person's personal assets.
D&O underwriters focus on:
• Company ownership and capital structure (who owns the company, are there outside investors?) • Financial condition of the company (revenue, profitability, debt level) • Pending or prior claims, litigation, or regulatory investigations • Recent significant transactions (acquisitions, disposals, financing rounds) • Industry and business model risk factors • Description of the board of directors (size, composition, independence) • Whether the company has experienced significant management changes • Whether there are any shareholder disputes or minority owner conflicts
Nonprofit D&O is a distinct segment. Nonprofit board members are volunteers who often don't realize they have personal liability for their governance decisions. Claims against nonprofit boards can arise from:
• Breach of fiduciary duty (failure to oversee finances properly) • Employment decisions (hiring, firing, executive compensation disputes) • Program decisions that harm beneficiaries • Conflicts of interest among board members • Grant compliance failures
Many nonprofits have D&O coverage bundled with management liability or directors and officers policies specifically designed for nonprofits. The ACORD 59 or a separate nonprofit D&O application may be used depending on the carrier.
Assuming small private companies don't need D&O — minority shareholder claims and lender claims are common
Not asking about pending regulatory investigations or shareholder disputes before binding
Overlooking Side A coverage — the most important protection for individual executives
Not mentioning D&O to nonprofit clients whose board members have significant personal exposure
Not disclosing recent financing rounds or investor agreements that could give rise to investor claims
Send your client a plain-English intake link. When they finish, the completed ACORD 59 and all required companion forms are generated and ready to submit.