What is D&O insurance?
Directors and Officers Liability Insurance (D&O) is liability insurance that protects company directors and officers (and the company itself in certain structures) against personal financial losses arising from claims that they breached their fiduciary duties, made wrongful acts in their corporate capacity, or otherwise face civil liability for corporate decisions. D&O is foundational for any venture-backed or publicly traded company — without it, qualified directors typically refuse to serve given personal exposure to securities class actions, derivative suits, regulatory enforcement, and breach-of-fiduciary-duty claims.
D&O policy structure (Side A, B, C)
- Side A — Direct director/officer coverage: protects directors and officers when company cannot or will not indemnify (insolvency, prohibition by law, derivative suit settlement). Highest priority for non-executive directors.
- Side B — Company reimbursement: reimburses company when it indemnifies directors/officers under bylaws or indemnification agreements.
- Side C — Entity coverage: covers company itself in securities claims (public companies primarily).
Common D&O exclusions
- Fraud, criminal conduct: excluded after final adjudication.
- Personal profit/illegal gain: excluded when proven.
- Bodily injury / property damage: covered by other lines.
- Prior known matters: known claims pre-policy excluded.
- Insured vs. insured: claims between insureds typically excluded (carve-outs for derivative actions, employment claims).
Buying D&O that pays
D&O policies differ less in price than in the exclusions that decide claims. The diligence points: Side A/B/C structure (is there non-indemnifiable-loss cover for individuals when the company cannot indemnify), insured-versus-insured carve-backs (shareholder derivative and liquidator claims are the realistic Turkish scenarios), regulatory-investigation cover including defence costs at the inquiry stage, tail/run-off cover at exit (six years is the M&A standard ask), and jurisdiction/territory matching where the group has US exposure. Turkish boards add a local layer: TTK art. 369/553 liability and the art. 376 zone make documented decision-making the first defence — D&O is the second, and insurers read board minutes exactly the way litigators do.