Private equity ownership brings unique challenges to directors and officers (D&O) insurance that standard policies often fail to address. Experts at Amwins, a leading U.S. insurance wholesaler, explained how the fast-paced, transaction-heavy nature of private equity deals creates risks that require specialized coverage.
Corey Turner, vice president at Amwins Brokerage in Atlanta, highlighted that private equity firms usually hold majority control in their portfolio companies, appoint board members, and use significant debt. This setup leads to multiple risks including boardroom disputes, transactional issues, and insolvency concerns. Unlike traditional private companies, private equity firms operate in cycles of raising capital, buying and selling businesses. This cycle adds several layers to D&O liability, since coverage must protect both the firm’s investment and the individuals on the boards.
Philip Collins, executive vice president at Amwins Brokerage in Franklin, Tennessee, pointed out that private equity firms are always planning exits. Policies for portfolio companies often include clauses anticipating future sales. Although merger and acquisition activity slowed last year, claims related to failed deals or aggressive acquisition strategies have increased. Sellers sometimes allege misrepresentation or accuse firms of not intending to close deals, causing heightened legal risks in private equity-backed businesses.
Standard D&O policies often fall short in three key areas, according to Amwins specialists. They may contain exclusions for antitrust or breach of contract claims that are common in private equity deals. Coordination between the sponsor and portfolio company policies can be unclear, leading to delays or disputes in claim handling. Also, piling endorsements onto a standard form can create errors or gaps in coverage, especially when deal timelines are tight.
Amwins responded to these challenges by creating a tailored D&O policy specifically designed for private equity portfolio companies. This manuscript form combines the best coverage elements into one clear document backed by multiple insurers. This helps provide consistent terms across carriers, easier customization, and fewer conflicts than retrofitting standard policies.
As the largest wholesaler in the U.S., Amwins plays a vital role by bringing together enough deal flow to keep this specialized policy market-wide and aligned. Their teams know which contract terms underwriters can stretch on and which they won’t, helping to speed up approvals during fast-moving mergers and acquisitions. Retail insurance brokers can rely on Amwins’ expertise to offer broader coverage with higher limits and smooth coordination between parent firms and portfolio companies.
Private equity clients today expect protections beyond basic policies. That means brokers need to understand when a tailored approach is necessary and partner with wholesalers who have deep market knowledge. Amwins’ exclusive D&O solution is one example of how the insurance industry is evolving to meet the specialized needs of private equity-backed companies.