Series A insurance: what changes when you raise

Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited · Last reviewed 2026-08-06

Closing a Series A is a genuine inflection point. Your seed round probably felt like a leap of faith on a small, tight team; a Series A is different in character. You've brought in an institutional venture capital investor, you're building a proper board, and you're about to hire quickly, sign larger contracts and take on obligations that didn't exist a year ago. Your insurance needs to move with all of that — and one cover in particular tends to appear on the critical path to completion.

This guide walks through what actually changes when you raise a Series A, why D&O suddenly matters, and the practical sequence of what to sort before completion and in the first 90 days after. It's written for founders who'd rather understand the reasoning than be handed a checklist.

Why does D&O insurance suddenly come up at Series A?

Directors' & Officers' liability insurance protects individuals — your directors and senior officers — against claims made against them personally for decisions they made running the company. That personal dimension is the whole point, and it's why the topic arrives with your new investor.

When an institutional VC leads a round, they almost always take a board seat, often filled by an investor-appointed nominee director. That person is now personally exposed to the same director-level liabilities as your founders: claims from shareholders, regulators, creditors, employees or commercial counterparties alleging a breach of duty, misstatement or mismanagement. Understandably, neither the investor nor their nominee wants to accept that exposure without protection in place. So D&O cover becomes an investor expectation — and it's frequently written into the term sheet or the conditions to completion.

It's worth being precise here, because founders often hear this wrong: D&O is not a legal or statutory requirement in the UK. No law compels you to buy it. What makes it feel mandatory at Series A is contractual — your investors require it as a condition of the deal, and reasonably so. That distinction matters, because it tells you the driver is your funding agreement, not a regulator, and it means the specifics are negotiable and worth getting right rather than rushing.

Good D&O typically responds to the defence costs and damages of covered claims against directors, and well-structured programmes include cover that protects individuals even where the company can't or won't indemnify them. If you want the mechanics in depth, our companion guide on directors' & officers' insurance explained unpacks how the cover is structured and where the common gaps are.

Larger or more complex risk? Speak directly to a director — call 0117 325 0027 or email info@apexinsurancebrokers.co.uk.

What should I read in the term sheet before I agree anything?

Term-sheet wording around insurance varies from one investor to the next, so treat this as a prompt to read carefully and take specialist input rather than a fixed template. A few things are worth checking with your lawyers and broker together:

• What cover is actually required — usually D&O, but the clause may reference a limit of indemnity, specific extensions, or a requirement to maintain cover for a period after an exit or a director leaving (run-off).
• Who must be covered — investor-appointed and non-executive directors will expect to sit within the same programme as the founders, on the same terms.
• When it must be in place — some conditions require cover to be bound at or before completion, which shapes your timeline more than founders expect.
• Any information or notification obligations — undertakings to keep the policy in force and to notify the investor of material changes.

The reason to involve a broker at this stage, rather than after signing, is simple: it's far easier to place a policy that genuinely meets the wording than to retrofit one once you've committed to a clause you can't practically satisfy.

D&O is the headline — but what else changes?

D&O is the change that makes the term sheet, but it's rarely the only shift. A Series A tends to scale several exposures at once, and the covers below usually move in step with the business.

Higher professional indemnity limits as contracts grow

If you sell software, advice or any service where a client could suffer a financial loss from your work, you likely already carry professional indemnity (PI) cover. Post-Series A, the contracts get bigger and the customers get more sophisticated — and enterprise clients frequently specify a minimum PI limit of indemnity in their own contracts. Limits that were fine at seed can look thin against a large customer's requirements. This is less about a single "right" number and more about matching your cover to the contracts you're now signing; illustrative limits of £1m, £5m or £10m are common reference points, but the appropriate level is driven by your client base and contractual commitments, not a rule of thumb.

Employment practices exposure as headcount rises

Hiring fast changes your risk profile. More employees means more scope for claims relating to the employment relationship — allegations of unfair dismissal, discrimination, harassment or similar. Employment practices liability (EPL) cover, often available as part of a management liability or D&O package, responds to the defence costs and awards from these claims. It becomes materially more relevant as you move from a handful of people to a growing team with formal processes, managers and structure.

Don't confuse this with employers' liability insurance, which is a separate and genuinely legal requirement. Under the Employers' Liability (Compulsory Insurance) Act 1969, once you employ staff you must hold employers' liability cover, subject to some narrow exceptions — it protects employees who are injured or fall ill because of the work they do for you. Failing to hold it where required can carry penalties, so it's one to confirm is in place as you grow the team. Our guide to insurance when you start hiring covers the people-related covers in more detail.

Cyber cover for a bigger attack surface

By Series A you're usually holding more customer data, running more integrations and presenting a larger, more attractive target. Cyber insurance can respond to the costs of a breach or attack — incident response, data restoration, business interruption, liabilities to affected third parties and, increasingly, the practical support of a specialist response team when something goes wrong at 2am. Enterprise customers and some investors are also starting to ask about it during diligence.

Key person cover as reliance concentrates

Institutional investors have just backed a team, and often a small number of individuals whose departure would genuinely hurt the business. Key person insurance provides the company with a financial cushion if a named founder or critical hire dies or becomes seriously unable to work — buying you time to stabilise, recruit and reassure the board. It's not always a term-sheet condition, but it's a conversation that fits naturally into a Series A.

What drives the cost of all this?

We won't quote prices here, because a realistic figure only comes from your actual details — and anyone giving you a number before seeing them is guessing. What we can be clear about is the factors insurers weigh: your sector and the nature of what you do, revenue and growth trajectory, headcount, the size and type of contracts you sign, your funding history and balance sheet, the limits of indemnity you choose, your claims history, and — for D&O and cyber specifically — your governance, board composition and security posture. Two companies at the same funding stage can look quite different once those are laid side by side, which is exactly why tailored advice beats a template.

What should I sort before completion?

The pre-completion window is where a good broker earns their keep, because insurance can sit on the critical path without anyone flagging it until the last week. Aim to have the following moving well before the deadline:

• Read the insurance conditions early — get the D&O wording, required limits and any run-off obligations in front of your broker and lawyers as soon as the term sheet is agreed.
• Start the D&O placement in good time — underwriters need information about the business, the board and the round, and rushing this at the eleventh hour rarely produces the best terms.
• Confirm the policy meets the clause — check the cover as offered genuinely satisfies what the investor requires, including who is named and covered.
• Line up the effective date — if cover must be bound at or before completion, coordinate so the policy incepts exactly when the deal needs it to.

What about the first 90 days after the raise?

Once the money's in and the board is formed, insurance stops being a completion condition and becomes part of running a scaling company. The first quarter is a good moment to get the wider programme onto a proper footing:

• Brief your new board on the D&O in place — your investor's nominee will want to understand the cover protecting them; a clear summary builds trust early.
• Revisit PI limits against your pipeline — as larger contracts come through, check your limits still meet what enterprise customers contractually require before you sign.
• Confirm employers' liability is correct as you hire — make sure the legally required cover keeps pace with a growing headcount, and consider employment practices cover alongside it.
• Put cyber on the roadmap — align cover with the security improvements you're likely making post-raise, and be ready for diligence questions from bigger clients.
• Set a review rhythm — a scaling company outgrows its insurance quickly; a scheduled check-in stops gaps opening between rounds.

If you'd rather talk it through than work from a list, that's usually the better route at this stage — the right structure depends on your specifics. You can speak to an Apex specialist about building a programme that fits where you are now and where the next 18 months are heading.

Where does this sit in the wider journey?

Series A is one stage in a longer arc, and your insurance should evolve at each step rather than resetting each time. If you're mapping the whole path, our startup insurance guide sets out how cover typically develops from pre-seed through to later rounds — useful context for planning ahead of your next raise rather than scrambling at each one.

The through-line is simple: at Series A, insurance shifts from something you buy to protect the company to something that also protects the people around the boardroom table — including the investor who just backed you. Getting D&O and the surrounding covers right is part of showing your new board you run a serious business. It's exactly the kind of thing worth having a real conversation about.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This article is general information, not advice on a specific policy or a recommendation to buy any product.