{"id":16048,"date":"2021-02-09T11:04:41","date_gmt":"2021-02-09T11:04:41","guid":{"rendered":"https:\/\/insuropedia.in?p=16048"},"modified":"2026-07-27T09:58:20","modified_gmt":"2026-07-27T09:58:20","slug":"how-to-negotiate-the-best-price-for-a-do-policy","status":"publish","type":"post","link":"https:\/\/pamstaging2.securenow.in\/insuropedia\/how-to-negotiate-the-best-price-for-a-do-policy\/","title":{"rendered":"Negotiating the best price for a D&#038;O policy"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><p>A directors\u2019 and officers\u2019 (D&amp;O) liability insurance policy takes care of the financial liabilities of an organization\u2019s senior management. Such liabilities arise when mistakes or wrong decisions occur. These, in turn, could result in financial losses for third parties. If these individuals then make a legal claim to recover their losses, a D&amp;O policy covers the directors and officers. So how to negotiate the best price for a D&amp;O insurance policy?<\/p>\n<h2 data-path-to-node=\"3\">Key Takeaways<\/h2>\n<ul data-path-to-node=\"4\">\n<li>\n<p data-path-to-node=\"4,0,0\"><b data-path-to-node=\"4,0,0\" data-index-in-node=\"0\">Avoid Over-Insuring Policy Limits:<\/b> Selecting an overly ambitious sum insured leads to high, unnecessary premium costs; policy limits should directly mirror realistic company liability exposures.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"4,1,0\"><b data-path-to-node=\"4,1,0\" data-index-in-node=\"0\">Strategic Deductible Adjustments Save Costs:<\/b> Increasing deductibles on corporate reimbursement clauses (Side B) lowers premium rates while maintaining safety nets for severe litigation.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"4,2,0\"><b data-path-to-node=\"4,2,0\" data-index-in-node=\"0\">Entity EPLI is a Major Cost Driver:<\/b> Because employment practice claims are frequent, Entity EPLI is one of the most expensive extensions-excluding it or insuring it separately can substantially reduce total premiums.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"4,3,0\"><b data-path-to-node=\"4,3,0\" data-index-in-node=\"0\">Geographical Scope Dictates Pricing:<\/b> Excluding US and Canadian jurisdictions from territorial coverage drastically reduces policy costs due to lower legal defense expenditures in domestic markets.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"4,4,0\"><b data-path-to-node=\"4,4,0\" data-index-in-node=\"0\">Multi-Quote Benchmarking Grants Leverage:<\/b> Comparing quotes across multiple commercial insurers equips corporate buyers with data to negotiate pricing discounts, fee waivers, and customized endorsements.<\/p>\n<\/li>\n<\/ul>\n<p>The D&amp;O policy coverage is quite comprehensive. It covers settlements payable to third parties as well as legal and defense costs that an organization incurs. In fact, as an organization, you can select the sum insured.<\/p>\n<p>Then, depending on the coverage selected and other factors, the insurer determines the D&amp;O policy premium. However, you can negotiate a reduction in the price of the D&amp;O insurance policy. Here are some ways in which to do this.<\/p>\n<h3><strong>Choose the right coverage<\/strong><\/h3>\n<p>It is important for you to choose the right <a href=\"https:\/\/securenow.in\/commercial-liability-insurance\/director-officer-liability-insurance\">D&amp;O policy coverage<\/a>. If coverage is insufficient, you will incur considerable out-of-pocket expenses. On the other hand, if the coverage is too high, there would be unnecessary premium payments. Thus, you should assess coverage needs and make the right choice. This would also allow you to negotiate the premium amount.<\/p>\n<h3><strong>Deductible<\/strong><\/h3>\n<p>A high deductible will reduce your premium but you may have a large out-of-pocket in any situation. Too small a deductible will increase your premium. For a policy with a sum assured of Rs 2 to 5 crore, a deductible of Rs 1 lakh is typically appropriate.<\/p>\n<h3><strong>Pick extensions wisely<\/strong><\/h3>\n<p>Policy extensions help in enhancing the scope of coverage but they come at an additional cost. Thus, when selecting extensions, you should be careful. You should understand the scope of available extensions and choose only those that you would need. If the insurance company offers additional extensions, you can negotiate and drive down the premium.<\/p>\n<p>An expensive extension is the Entity EPLI. The reason this is expensive is that maximum claims arise in this area. If you do not expect employment-related claims or have that insured separately then drop the entity EPLI extension. However, this should be a considered decision.<\/p>\n<h3><strong>Look for discounts<\/strong><\/h3>\n<p>You can look for different types of premium discounts that insurance companies offer. You can also negotiate with the insurer for discounts on online premium payments or for opting for comprehensive coverage. If you bargain for premium discounts, you can get the best price for the policy. An experienced broker like SecureNow is immensely valuable in such negotiations.<\/p>\n<h3><strong>Select geographical coverage correctly<\/strong><\/h3>\n<p>If your clients are all India-based, then you do not need international cover. Similarly, if you can exclude the US from coverage, it will reduce prices because liability costs pertaining to the US are the highest.<\/p>\n<h3 data-path-to-node=\"0\">Summary Table: Price Negotiation Strategies for D&amp;O Insurance Policies<\/h3>\n<div class=\"horizontal-scroll-wrapper\">\n<div class=\"table-block-component\">\n<div class=\"table-block has-export-button new-table-style has-scrollbar is-at-scroll-start\">\n<div class=\"table-content md-content\" data-hveid=\"0\" data-ved=\"0CAAQ3ecQahgKEwjDrIHAmvKVAxUAAAAAHQAAAAAQzgE\">\n<table data-path-to-node=\"1\">\n<thead>\n<tr>\n<td><strong>Negotiation Dimension<\/strong><\/td>\n<td><strong>Premium Optimization Strategy<\/strong><\/td>\n<td><strong>Strategic Financial Impact<\/strong><\/td>\n<td><strong>Operational Best Practice<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span data-path-to-node=\"1,1,0,0\"><b data-path-to-node=\"1,1,0,0\" data-index-in-node=\"0\">Sum Insured Calibration<\/b><\/span><\/td>\n<td><span data-path-to-node=\"1,1,1,0\">Align policy limits strictly with corporate risk exposure rather than buying arbitrary, high caps.<\/span><\/td>\n<td><span data-path-to-node=\"1,1,2,0\">Eliminates excess premium spend from over-insuring, freeing up corporate budget.<\/span><\/td>\n<td><span data-path-to-node=\"1,1,3,0\">Perform an exposure audit considering employee count, company valuation, and regulatory scope.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"1,2,0,0\"><b data-path-to-node=\"1,2,0,0\" data-index-in-node=\"0\">Deductible Structuring<\/b><\/span><\/td>\n<td><span data-path-to-node=\"1,2,1,0\">Opt for higher self-insured retentions\/deductibles on corporate claims (Side B &amp; Side C).<\/span><\/td>\n<td><span data-path-to-node=\"1,2,2,0\">Directly lowers base premium rates while retaining catastrophic financial protection.<\/span><\/td>\n<td><span data-path-to-node=\"1,2,3,0\">Maintain zero or minimal deductibles for individual Side A coverage to protect director assets.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"1,3,0,0\"><b data-path-to-node=\"1,3,0,0\" data-index-in-node=\"0\">Selective Endorsements<\/b><\/span><\/td>\n<td><span data-path-to-node=\"1,3,1,0\">Exclude costly, non-essential riders like Entity EPLI or US jurisdiction extensions if unneeded.<\/span><\/td>\n<td><span data-path-to-node=\"1,3,2,0\">Cuts endorsement surcharges-Entity EPLI and US covers often carry the highest premium loads.<\/span><\/td>\n<td><span data-path-to-node=\"1,3,3,0\">Carve out unnecessary regional covers or buy standalone policies where cost-effective.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"1,4,0,0\"><b data-path-to-node=\"1,4,0,0\" data-index-in-node=\"0\">Territorial Scope<\/b><\/span><\/td>\n<td><span data-path-to-node=\"1,4,1,0\">Restrict geographical jurisdiction to India or non-US territories if domestic-focused.<\/span><\/td>\n<td><span data-path-to-node=\"1,4,2,0\">Avoids premium spikes driven by high litigation costs in jurisdictions like North America.<\/span><\/td>\n<td><span data-path-to-node=\"1,4,3,0\">Limit coverage strictly to countries where the business actively operates, sells, or maintains subsidiaries.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"1,5,0,0\"><b data-path-to-node=\"1,5,0,0\" data-index-in-node=\"0\">Broker Benchmarking<\/b><\/span><\/td>\n<td><span data-path-to-node=\"1,5,1,0\">Obtain competitive quotes from multiple general commercial insurers before policy renewal.<\/span><\/td>\n<td><span data-path-to-node=\"1,5,2,0\">Creates pricing leverage to negotiate discounts, waiver of sub-limits, or better terms.<\/span><\/td>\n<td><span data-path-to-node=\"1,5,3,0\">Leverage commercial insurance brokers to run competitive tenders across top-tier underwriters.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h3><strong>Compare policies<\/strong><\/h3>\n<p>Many insurance companies offer D&amp;O policies. To get the best price, compare available plans. By doing so, you can find plans that offer the best coverage benefits and have the lowest premiums. Moreover, when you have quotes from multiple insurers, you can negotiate the premium easy to get the best price. SecureNow\u2019s online platform allows organizations to compare available <a href=\"https:\/\/securenow.in\/commercial-liability-insurance\/director-officer-liability-insurance\">D&amp;O liability insurance policies<\/a>. You can provide your coverage requirements, and SecureNow can give you deeply researched quotes for some of the best plans across insurers.<\/p>\n<h3 data-path-to-node=\"6\">Frequently Asked Questions (FAQs)<\/h3>\n<h4 data-path-to-node=\"7\"><b data-path-to-node=\"7\" data-index-in-node=\"0\">1. How does adjusting the deductible lower the premium of a D&amp;O liability insurance policy?<\/b><\/h4>\n<p data-path-to-node=\"8\"><strong>A)<\/strong> A deductible (or self-insured retention) is the out-of-pocket amount a company agrees to pay before insurance coverage kicks in. By opting for a higher deductible on corporate claims (such as Side B reimbursement or Side C securities), the insurer assumes less financial risk for minor claims. In turn, underwriters lower the annual base premium rate.<\/p>\n<h4 data-path-to-node=\"9\"><b data-path-to-node=\"9\" data-index-in-node=\"0\">2. Why is Entity Employment Practices Liability Insurance (EPLI) one of the most expensive D&amp;O extensions?<\/b><\/h4>\n<p id=\"p-rc_63ab9c6ede414419-56\" data-path-to-node=\"10\"><span class=\"citation-59 citation-end-59\"><strong>A)<\/strong> Entity EPLI covers wrongful termination, workplace harassment, and discrimination claims filed against the company entity.<\/span> Because employment disputes occur far more frequently than shareholder lawsuits or regulatory enforcement actions, insurers price this extension higher to compensate for the higher probability of payouts.<\/p>\n<h4 data-path-to-node=\"11\"><b data-path-to-node=\"11\" data-index-in-node=\"0\">3. How does geographical territorial scope impact overall D&amp;O insurance policy pricing?<\/b><\/h4>\n<p data-path-to-node=\"12\"><strong>A)<\/strong> Litigation costs, court filing fees, and legal defense retainers vary globally. The United States and Canada have high litigation rates and expensive legal fees. Excluding US\/worldwide jurisdiction and restricting coverage to domestic or regional territories significantly lowers D&amp;O insurance premiums.<\/p>\n<h4 data-path-to-node=\"13\"><b data-path-to-node=\"13\" data-index-in-node=\"0\">4. What operational factors can a company present to negotiate D&amp;O premium discounts?<\/b><\/h4>\n<p data-path-to-node=\"14\"><strong>A)<\/strong> Companies can negotiate lower premium quotes by demonstrating strong risk mitigation controls, including:<\/p>\n<ul data-path-to-node=\"15\">\n<li>\n<p data-path-to-node=\"15,0,0\">Clean financial audit reports and strong internal corporate governance.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"15,1,0\">A multi-year history of zero reported D&amp;O or shareholder claims.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"15,2,0\">Transparent disclosures during corporate restructuring, funding rounds, or M&amp;As.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"15,3,0\">Agreeing to higher deductibles or longer policy term commitments.<\/p>\n<\/li>\n<\/ul>\n<h4 data-path-to-node=\"16\"><b data-path-to-node=\"16\" data-index-in-node=\"0\">5. Why is market benchmarking essential before renewing a D&amp;O insurance policy?<\/b><\/h4>\n<p data-path-to-node=\"17\"><strong>A)<\/strong> Commercial general insurance companies evaluate risk, loss ratios, and industry sector exposures using different internal actuarial models. Benchmarking quotes across multiple underwriters allows corporate decision-makers to leverage competing pricing structures, negotiate broader policy limits, and eliminate unneeded sub-limit restrictions prior to policy inception.<\/p>\n<p><script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"How does adjusting the deductible lower the premium of a D&O liability insurance policy?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"A deductible (or self-insured retention) is the out-of-pocket amount a company agrees to pay before insurance coverage kicks in. By opting for a higher deductible on corporate claims (such as Side B reimbursement or Side C securities), the insurer assumes less financial risk for minor claims. 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The United States and Canada have high litigation rates and expensive legal fees. Excluding US\/worldwide jurisdiction and restricting coverage to domestic or regional territories significantly lowers D&O insurance premiums.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"What operational factors can a company present to negotiate D&O premium discounts?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Companies can negotiate lower premium quotes by demonstrating strong risk mitigation controls, including: Clean financial audit reports and strong internal corporate governance. A multi-year history of zero reported D&O or shareholder claims. Transparent disclosures during corporate restructuring, funding rounds, or M&As. 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Benchmarking quotes across multiple underwriters allows corporate decision-makers to leverage competing pricing structures, negotiate broader policy limits, and eliminate unneeded sub-limit restrictions prior to policy inception.\"\n      }\n    }\n  ]\n}\n<\/script><\/p>\n<h4><b>About The Author<\/b><\/h4>\n<p><strong>Rajesh\u00a0<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">MBA Finance<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With a wealth of expertise in the insurance realm, Rajesh is a distinguished writer specializing in articles focusing on directors and officers insurance for SecureNow. Boasting 9 years of experience in the industry, he profoundly understands the complexities surrounding directors and officers liability coverage. Their articles delve into the intricacies of D&amp;O insurance, providing readers with invaluable insights into risk mitigation strategies and policy considerations. Renowned for their comprehensive knowledge and attention to detail, Rajesh is dedicated to delivering informative and engaging content that empowers individuals and businesses to navigate the complexities of insurance with confidence.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A directors\u2019 and officers\u2019 (D&amp;O) liability insurance policy takes care of the financial liabilities of an organization\u2019s senior management. Such liabilities arise when mistakes or wrong decisions occur. These, in turn, could result in financial losses for third parties. If these individuals then make a legal claim to recover their losses, a D&amp;O policy covers [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_lmt_disableupdate":"no","_lmt_disable":"no","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[305,304],"tags":[862,1086],"class_list":["post-16048","post","type-post","status-publish","format-standard","hentry","category-pricing-directors-and-officers-liability-insurance","category-directors-and-officers-liability-insurance","tag-directors-and-officers-liability-insurance-policy","tag-do-insurance-premium"],"acf":[],"modified_by":"SecureNow","_links":{"self":[{"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/16048","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/comments?post=16048"}],"version-history":[{"count":15,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/16048\/revisions"}],"predecessor-version":[{"id":36855,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/16048\/revisions\/36855"}],"wp:attachment":[{"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/media?parent=16048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/categories?post=16048"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/tags?post=16048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}