What 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
- 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.