What is D&O insurance and who needs it?

D&O covers individual directors, officers, and (in most modern forms) the entity itself against claims that decisions made in their leadership capacity caused harm. Typical triggers: breach of fiduciary duty, misrepresentation in financial disclosures, regulatory investigations, shareholder derivative suits, and a long tail of "leadership decisions had financial consequences" claims. Three groups commonly need it: (1) VC/PE-backed companies — investors almost always require D&O before closing a funding round, (2) public companies and pre-IPO companies — securities exposure is severe, (3) nonprofits and private companies with active boards — including healthcare practices with formal boards, multi-doctor groups, and healthcare nonprofits. Sole proprietorships generally don't need it; LLCs without outside investors usually don't.