Directors & Officers Insurance Ontario

Who it’s for

Owners and directors of small and mid-sized private companies
Volunteer directors of not-for-profits, charities, condo boards and associations
Companies with outside investors, partners or shareholders who aren't involved day to day
Family businesses where a spouse or relative is a director or officer
Owners serving on another organization's board

What it covers

Directors and officers insurance protects the people who make decisions for an organization: directors, officers and often employees acting in a management role. If someone claims a decision you made caused them a loss, D&O can pay for your defence and for covered settlements or judgments.

Most policies are built in three parts, often called “sides”:

Side A: covers directors and officers personally when the company can’t or won’t reimburse them, for example if the company is insolvent.
Side B: reimburses the company when it pays to defend its directors and officers.
Side C (entity coverage): covers the company itself when it’s named in the same claim.

Typical claims include allegations of mismanagement, breach of duty, misrepresentation to investors or lenders, employment practices issues (wrongful dismissal, discrimination, harassment), and regulatory investigations. Employment practices coverage is sometimes included and sometimes a separate policy, so it’s worth confirming which you have.

D&O policies are usually written on a “claims-made” basis, which means the policy in force when the claim is made is the one that responds, not the policy in force when the decision was made. That’s why gaps in coverage, or switching insurers carelessly, can leave you exposed for past decisions.

What it doesn’t cover, and common gaps

Fraud and intentional wrongdoing, once it’s established.
Bodily injury and property damage. Those belong to your general liability and property policies.
Statutory debts. Under the Ontario Business Corporations Act, directors can be personally liable for up to six months of unpaid employee wages. Federal tax law can make directors liable for unremitted payroll source deductions and GST/HST. Many D&O policies won’t pay these debts, though some help with defence.
Prior known issues. A dispute you knew about before buying the policy usually isn’t covered.
Insured versus insured. Many policies exclude claims between directors of the same company, which matters for family businesses and partnerships.
Run-off. If you sell the company or step off a board, you need to think about who covers claims about your time there.

Where your business and family policies overlap

D&O is, at its heart, about your personal assets: your house, your cottage, your investments.

Your home and cottage are what a claimant looks at. If a claim gets past the company, the next stop is what you own personally. That’s exactly why the policy exists.
Spouses and family directors. In many family businesses, a spouse or adult child is listed as a director or officer, sometimes just on paper. They carry the same legal exposure as everyone else on the board. Many policies also cover a director’s spouse when a claimant goes after jointly held property, but that needs to be confirmed.
Your umbrella won’t do this job. A personal umbrella policy is built for things like car accidents and injuries at your home. It typically excludes your work as a director or officer. Owners are often surprised by that.
Outside boards. If you sit on a not-for-profit board, a school board or another company’s board, that organization’s D&O may or may not cover you well. Some company D&O policies can extend to outside positions.
Holding companies. If you’re a director of an operating company, a holdco and a property company, all of them should be considered, not just the one that buys insurance.

Steve maps out every company and board you’re connected to, who in your family holds a director or officer role, and what you own personally, then checks whether the D&O and personal policies work together.

How Steve works on this

D&O wordings vary a lot from insurer to insurer, and the differences are in the details. Steve reads the wording with you, explains the exclusions that matter for your situation, gives you options and tells you which he’d lean toward and why. He pays attention to claims-made timing, so switching insurers doesn’t leave a gap for past decisions. At renewal, he calls to talk through changes: new directors, new investors, a sale or reorganization, or a new board you’ve joined.

If you’d like a second set of eyes on your D&O coverage, book a review.

Common questions

I own my company outright. Who would sue me?

Employees, former employees, customers, suppliers, creditors, regulators, and sometimes minority shareholders or business partners. Employment-related claims, like wrongful dismissal or harassment allegations, are among the most common. Even a claim with no merit costs money to defend.

Can a director really be personally liable in Ontario?

Yes. For example, under the Ontario Business Corporations Act, directors can be personally liable to employees for up to six months of unpaid wages, and federal tax law can make directors liable for unremitted payroll source deductions and GST/HST. These are separate from lawsuits over business decisions.

Does D&O insurance pay unpaid wages or taxes for me?

Often not the debt itself. Many policies exclude or limit statutory amounts like unpaid wages and taxes, though they may help with defence costs. It's important to read exactly how your policy treats these, rather than assume.

I'm a volunteer on a not-for-profit board. Am I exposed?

Yes. Volunteer directors have legal duties and can be named in lawsuits just like directors of a for-profit company. Many good board members won't serve without D&O coverage, and they're right to ask.

Can my spouse be named in a claim?

In some cases, a claimant may go after property held jointly with a spouse. Many D&O policies extend coverage to a director's spouse for that reason. It's worth confirming that your policy includes it.