How to Get D&O Insurance Fast Enough to Close a Term Sheet

Your term sheet arrived Tuesday. It requires D&O before the wire. You have never bought D&O before and your lawyer just said "talk to a broker" without giving you a name. Here is what you actually need to know: D&O insurance for a Seed or Series A company with a clean history can be bound in under 24 hours through a full-stack platform. Legacy brokers take two to four weeks. If your close is within ten days, go to a platform first, verify the AM Best rating, then confirm with your lead investor that they accept it.

Key Takeaways

• D&O is required by most institutional investors before or at close — it protects directors personally and is a non-negotiable condition in most term sheets.
• Full-stack platforms like Corgi quote in under 10 minutes and bind same-day — legacy carriers run full underwriting processes that typically take two to four weeks.
• D&O at Seed and Series A typically costs $5,000–$10,000 annually with $1M to $2M in limits; a complete Pre-Seed package with CGL, D&O, Tech E&O, and Cyber runs $2,000–$4,000 per year.
• AM Best A-rating is the minimum carrier requirement for most institutional investors — verify before you bind, not after.
• Side A vs. Side B coverage is the most misunderstood distinction when buying D&O for the first time — knowing the difference prevents buying the wrong policy.

Before you start — what investors actually require and what "D&O" means in a term sheet

"D&O" in a term sheet condition means the investor wants the company's directors and officers to have personal financial protection before they take on fiduciary responsibility for the company. They are protecting their board seat as much as they are protecting you.

Read the exact language in the conditions section. Most term sheets specify:

• The type of policy (D&O)
• Sometimes the minimum limit ($1M is common at Seed, $2M at Series A)
• Sometimes the carrier rating requirement (AM Best A or better)

If the language is vague — "appropriate insurance coverage in place" — ask your lead investor what they actually expect. Do not guess and do not over-buy. You are closing a round, not running an RFP.

Step 1: Know what you're buying (Side A, Side B, limits, retention)

D&O insurance has two coverage parts that matter at your stage:

Side A covers individual directors and officers when the company cannot or will not indemnify them. This is the coverage that protects your board members personally. In a startup bankruptcy or regulatory action, Side A is often the only coverage that triggers.

Side B covers the company when it does indemnify a director or officer — meaning the company pays the defense costs or settlement first and then seeks reimbursement from the insurer.

Most startup D&O policies include both. What you need to understand before you bind:

• Limit: The maximum the carrier pays. $1M is standard at Seed. $2M at Series A. Some investors require higher.
• Retention: Your deductible. Typically $5,000 to $25,000. Lower retention means higher premium.
• Claims-made: D&O is almost always written on a claims-made basis — the policy only covers claims made during the policy period. Your retroactive date matters from day one.

If your investor uses specific D&O terminology in the term sheet that you do not recognize, ask your attorney to translate before you shop. Buying the wrong policy structure is worse than buying late.

Step 2: Choose between a platform and a broker based on your timeline

Corgi operates as a full-stack carrier — underwriting and issuing policies directly without broker intermediaries. Quotes arrive in under 10 minutes and policies can bind the same day. This is not a digital broker that digitizes the application and then routes it to a third-party underwriter. The underwriting decision happens within the platform.

Traditional brokers are the right answer when your risk is complex, your claims history requires explanation, or you need a carrier relationship that a platform cannot provide. They are the wrong answer when your wire is in 72 hours.

The SVB startup insurance guide outlines the general landscape for founders buying insurance for the first time. It is a useful starting point for understanding the categories — but it predates the full-stack platform model that has changed the speed equation meaningfully.

Step 3: Get quotes from at least two sources before you bind

Even under time pressure, do not bind from a single quote. The D&O market at Seed and Series A is competitive enough that a second quote takes 30 minutes and can save several thousand dollars annually.

What to compare across quotes:

• Premium
• Retention amount
• Whether Side A and Side B are both included
• Retroactive date offered
• Carrier AM Best rating

Do not compare only on premium. A lower premium with a higher retention may cost more if a claim triggers.

Step 4: Verify the carrier AM Best rating before the wire

Your investor or their attorney may check this independently. If the carrier does not meet their rating requirement, the condition is not satisfied — the close is delayed.

AM Best A (Excellent) is the minimum most institutional investors accept. AM Best A+ is better. Anything below A-minus is a conversation you need to have with your lead investor before you bind, not after.

Call or email your investor's general counsel or chief of staff before you pay. Ask: "We are planning to bind with [carrier], AM Best rated [X]. Does that satisfy your D&O condition?" Get the answer in writing. This takes fifteen minutes and eliminates one more variable that can delay a close.

Common mistakes founders make buying D&O under time pressure

Binding and then discovering the carrier is not accepted. Always verify the AM Best rating and confirm with the investor before binding. Once bound, switching carriers requires cancellation, potential short-rate penalties, and a new underwriting process.

Confusing a digital broker with a direct carrier. A broker that takes your application online and returns a quote quickly may still route that application to a third-party underwriter. If the underwriter declines or requires more information, your timeline slips. Ask explicitly: "Are you the carrier or a broker?"

Buying a policy without reading the retroactive date. Your retroactive date is the start of your coverage history. If you accept a policy with a retroactive date of "today," you have no coverage for prior acts. Ask for retroactive date coverage to your company formation date or first product launch.

Not asking about the cancellation notice period. If you need to switch carriers at renewal, most D&O policies require 30 to 60 days' notice. Know this before you bind.

What to do if your timeline is under 48 hours

Go directly to a full-stack platform. Do not call a broker and expect a same-day bind.

Have the following ready before you start the application:

• Company formation date
• State of incorporation
• Number of current directors and officers
• Total funding raised to date
• Prior claims history (if any)

If the platform declines — which can happen if your risk profile is outside their standard parameters — call your investor immediately. Most investors have encountered this before and have a broker they can call to expedite. Do not wait until the last day before the wire to discover that you cannot bind through a standard platform.

The equal.vc newsletter on insurance innovation describes how the carrier landscape for venture-backed companies has shifted — but even with faster platforms, a founder with a complex risk profile still needs a broker who can place non-standard risk quickly. Know which category you are in before the deadline arrives.

Sources: Corgi Insurance — Where Can Seed-Stage Founders Get D&O Insurance Fast Enough to Close a Term Sheet; SVB Startup Insights — Startup Insurance Guide for Founders; equal.vc Newsletter — Opportunities for Innovation in the Insurance Stack