DIRECTORS & OFFICERS
Directors & Officers
Any business with a board or advisory committee should consider purchasing a Directors & Officers insurance policy, including non-profit organizations. It’s not only the publicly-traded companies who need this protection. Directors and Officers liability insurance protects the personal assets of the organization’s directors and officers, and their spouses, in the event they are personally sued by employees, vendors, competitors, members, customers or other parties, for actual or alleged wrongful acts in managing a company or non-profit organization.
Common Types of Organizations that Need D&O Coverage
Educational Services Associations
Homeowners, Condo or Townhome Associations (HOA)
Job Training / Sheltered Workshop for Special Needs Individuals
Mental Health Associations
Social Service Organizations
Who Sues Non-Profit Organizations?
Donors – claims resulting from those who make donations to the organization, misrepresentation of the financial status of the organization, or misappropriation of funds
Suppliers, Contractors, Competitors – third party lawsuits can be filed for various reasons (i.e. use of trademarked property while promoting a fundraiser, product/company defamation, etc.)
Governmental & Regulatory Agencies – claims due to violations of the law, misappropriation of funds including grant money
Volunteers – hostile work environment, discrimination, harassment/humiliation
Customers, Clients, & Consumer Groups - claim by the recipient of the organization’s services, or a homeowner in the case of an HOA (misuse of funds, contract dispute, cost/quality of product/service, dishonesty or fraud, extension or refusal of credit)
Kristie English, M.Ed.
Principal / Agent
Why does our organization need a D&O policy when we agree in our bylaws that we will indemnify all board members?
While the intent of the nonprofit is to cover the expenses a board member might incur in defending an action and paying settlements or judgements related to their service on the board, there are circumstances when indemnification is not available. The organization may not have enough funds to cover the expenses, or the board may not feel it’s right to use donors’ funds to indemnify a board member, depending on the allegation being made. Having a D&O policy in place is also a great tool in recruiting strong volunteer board members.
We're here to help you protect your directors and officers.
Call us at (833) BIG-TREE / (425) 673-7948, or use our online form to request a quote.