How do you decide if your group needs directors insurance? The best answer would be that you have done a comprehensive analysis of the risks facing your organization and then compared these risks to the insurance you have. You then go talk to your broker and decide if you need more coverage. The directors insurance is intended to protect the board from actions taken against them as individuals. The typical examples are stakeholders who feel that the board has not discharged their fiduciary duty properly. This type of insurance can be used to cover legal fees for defending the board. Once a year the board should take a look at their coverage and decide if they need to make any changes.