• Why You Need Non-Profit Directors and Officers (D&O) Liability Insurance

    Why You Need Non-Profit Directors and Officers (D&O) Liability Insurance May 18, 2017

    By volunteering, you’re helping take care of others. Make sure you take care of yourself, too.

    If you sit on the Board of Directors of a non-profit organization, you have gone out of your way to help others. You want to make a difference, lend a hand in making the world a better place. But did you know that you may also be held liable for the actions you take for that organization? That means your personal assets could be at risk, unless you have the right liability coverage to protect you.

    Why Would Someone Sue A Non-Profit?

    Just like any company, a non-profit organization and its Board of Directors can be sued for errors, omissions, negligent acts, and breaches of duty in relation to employment practices, regulations, and fiduciary responsibilities.

    True Stories – Personal D&O Insurance to the Rescue:

    Think it can’t happen to the board you sit on?  Check out the below examples that may feel a little too close to home.

    • Acts such as employment-related discrimination, slander or defamation, wrongful failure to employ or promote, or wrongful demotion;
    • Conflict of interest, breach of contract, or fraudulent financial statements;
    • Mismanagement of funds such as assets being sold for unreasonably low prices or wasting assets;
    • Errors in judgement such as dissemination of false information, misleading statements or improper guarantees;
    • Negligence such as breach of duty, failure to review documents before signing, or failure to detect or stop embezzlement.

    Claims could be filed against you by parties outside the organization, including donors or beneficiaries, organization members or employees, other directors or officers of the organization, or government officials.

    According to the 2012 Directors and Officers Liability Survey by Towers Watson, 63% of non-profits surveyed reported claims against their directors and officers.

    Why You Need To Be Protected

    Homeowners coverage is not intended to respond to non-profit board liability. It does not address many types of alleged wrongful acts seen in non-profit director and officer liability claims. Without non-profit D&O coverage, you may only be covered up to the limits of your organization’s D&O liability.  What if that’s not enough?

    Many organizations operate on a tight budget and, as a result, carry only the minimum amount of liability insurance required by law. If coverage limits are exhausted due to a liability lawsuit, board members can be held personally responsible for the remaining judgement amount and/or legal fees.

    Brunswick Companies has several different options for you to choose from to make sure you have the best coverage for your personal assets and board positions. Call Michelle Hirsch today at 800-686-8080 to discuss your options.