Venture Capital Firms Look for D&O Insurance – Here’s Why

It may seem odd to put so much importance on D&O insurance, but partners at Venture Capital Firms will likely take board seats and want to know that there is proper insurance coverage in place to protect their personal liability. Putting D&O insurance in place before actively fundraising has unique coverage advantages. To learn more about this, contact an expert.

Why do VCs Care About D&O Insurance?

VCs care about D&O insurance when looking to invest in a growing business because it provides them with three main things: protection, proof of stability and promise of growth. For Venture Capital Firms, D&O liability insurance can bring peace of mind.

Protection

Directors and Officers Liability Insurance protects company assets, and those of the company against, against unforeseen events. When a VC decides to invest in your business they’re going to want to know that the business is not one liability from going bankrupt. For VCs, D&O insures not only the life of the business, but also the VC themself in the event of a claim.

Proof of Stability

When exploring a new investment, Venture Capital Firms are often drawn in by the product or service the business offers. But, a cool product isn’t always enough. VCs need to know they are investing in a stable business, something with an unbreakable base. D&O Insurance brings a sense of stability to a growing business and is a great way to attract VCs.

Promise of Growth

Similar to proof of stability, investors care about the longevity of a business. They look for the promise of growth, to ensure that their investment will be worthwhile. D&O insurance protects your business board members and assets so that your growing business can keep growing, no matter what claims come your way.

Protection is key when it comes to growing your business, and at HRO we want to help you ignite your business. Learn the Basics of D&O, or contact an expert at HRO Resources and get started with a quote today.