A D&O Insurance is a liability insurance which pays the directors and officers of a company, as indemnification/reimbursement for losses or defense costs in the event an Insured individual suffers such a loss as a result of a wrongful act, which the company does not indemnify the Directors and Officers.

Meaning, this policy helps the Insured individual pay for legal defense expenses which are not covered by the company.

Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously. Intentional illegal acts, however, are typically not covered under D&O policies.