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R&R Insurance Blog

Not-for-Profit Directors & Officers Liability: Why Do I Need It?

Posted by Julie Liebelt

charitable wordsWhat is "Not-for-Profit Directors & Officers Liability" and why do I need it?

The typical Not-for-Profit D&O policy will:

  • Protect entity and its directors and officers from claims that arise from their decisions and actions
  • Protect entity for non-bodily injury claims
  • Cover the personal liability of directors and officers as individuals and reimburses the company for claims that it has paid to a third party
  • Cover defense costs, settlements, and judgements
  • Answer on behalf of the entity to stakeholders, members, employees, and the public

Types of claims brought against not-for-profits:

  • Financial mismanagement / misuse
  • Anti-trust violations
  • Restraint of trade
  • Membership discrimination
  • Defamation
  • Conflict of interest
  • Breach of contract
  • Mistakes or errors in judgement
  • Employment related claims
    • Discrimination / harassment
    • Wrongful termination / refusal to hire

It also may be easier for a not-for-profit organization to enlist parties willing to serve on the board of directors if there is D&O insurance in place. See: "Exposures of Being a Member of the Board"

D&O policies can vary widely, as do the needs and exposures of not-for-profits. A thorough review with your agent is necessary to choose the right carrier partner for your organization.

For additional information and to receive a quote on this valuable coverage, please contact your R&R knowledgebroker.

Topics: D&O policy, non-profit insurance, Business Insurance