To ensure that your nonprofit organization is protected against liability, it’s important to have proper coverage. General liability insurance isn’t enough to protect your business if you employ a board of directors to help you meet your goals. Your insurance plan must include provisions for these directors and officers as well.
Directors and Officers Insurance for Nonprofits
If a claim is made against employment practices in your organization, any officer or manager of the company may be included in the claim. D&O insurance is necessary to cover the hefty legal fees and settlements associated with top level individuals.
When discussing options with your insurance agent, make sure your nonprofit D&O insurance policy includes provisions for many different scenarios, including:
• Unethical behavior – A former or current board member can sue or be sued for behavior that is deemed unsuitable or unethical.
• Negligence – Failing to perform promised duties to organizations or individuals can result in legal actions.
• Misrepresentation – If funding was provided for a specific event and it was found that the money wasn’t used for the described purpose, the entity will seek reimbursement for damages.
• Wrongful termination – If a senior executive is dismissed for any number of reasons, they may seek legal action.
Talk with your insurance agent to ensure that you are protected against unwanted legal claims.