Switching broker · Funding · 2026

Raised investment? What your investors will expect you to insure

A funding round changes who you're accountable to. Most investors will want specific cover in place — often as a condition of the money.

Part of: When to switch business insurance broker

In short

Once you take outside investment, insurance stops being only about protecting the business and becomes about protecting the people and the capital around it. Investment agreements and term sheets commonly require directors' and officers' insurance (protecting the board, including the investor's nominee), key person cover on the founders, and sometimes professional indemnity or cyber to a stated limit. None of this is required by law — it's required by your investors, contractually. A broker who works with funded businesses reads the clause, arranges exactly what's needed and gets the certificates to your lawyers before completion.

What investors typically ask for

Directors' & officers' (D&O) — almost always. It protects directors personally, including any investor-appointed director, and is routinely a completion condition.
Key person cover on founders whose loss would hit the plan.
Professional indemnity and cyber to a named limit if you're a services, software or data business.
Employers' liability (a legal requirement at £5m once you have staff) and public liability.

Getting it done before completion

Send the insurance warranties and conditions from the term sheet or SPA to a broker early — not the week of signing.
Match the limits and wordings to what the agreement actually says; don't over-buy to be safe.
Get certificates issued in the form the investor's lawyers will accept.
Review the whole programme — a funded business is a different risk from a bootstrapped one.

D&O is investor-required and contractually required. It is never a legal requirement — which is exactly why it's easy to overlook until a lawyer asks for it.

Frequently asked

Is directors' and officers' insurance a legal requirement after raising money?

No. It's a contractual requirement your investors impose, and a sensible protection for every director personally. It is not required by law.

How much D&O cover do investors expect?

It varies with the round and the sector; the investment agreement usually names a limit. A broker sizes it to the agreement and the business rather than a default figure.

Do I need key person insurance?

Investors often ask for it on founders whose loss would derail the plan. It pays the company a sum to steady the business, and is commonly a term-sheet condition.

Can this be arranged quickly before completion?

Usually yes, if the broker sees the clause early. D&O and key person cover can normally be placed within days; leaving it to the last week is what causes problems.

Term sheet with an insurance clause? Send it over.

Forward the insurance warranties and your completion date. A named Apex broker will put the cover your investors require in place and get certificates to your lawyers.

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Apex Insurance Brokers is authorised and regulated by the Financial Conduct Authority (FRN 724952). See also our guides to insurance for startups and scale-ups. This page is general information, not advice.