What is Not-For-Profit D&O Liability Coverage?
D&O is written to:
- Protect the personal assets of an organization’s directors & officers & organization’s mission
- Protect the organization’s assets
- Provide reimbursement to the organization to indemnify D&O’s for their losses; and
- Help the organization monitor & provide defense costs associated with responding to lawsuits & negotiations
Why Not-For-Profit Organizations Should Consider Buying D&O Liability Coverage?
- Cost of defending lawsuits may exceed the net worth on many non-profit organizations.
- Judgements can be financially crippling and can come from vendors, donors, competitors, & governmental regulators.
- Organization’s indemnification may not be available.
- Business decisions made by board members can quickly impact the finances & operations of the organization.
- Unique conflicts of interest may exist due to complexity of responsibilities.
- Organizations will have a difficult time attracting qualified individuals to their boards without D&O coverage.
What Are the Sources of D&O/Employment Practice Claims?
- Donors
- Competitors
- Employees
- Governmental regulations
- Failure of a Fiduciary Duty
- Misuse of donor-restricted funds
- Improper conduct of volunteers or employees
- Failure to fulfill mission
- Wrongful Termination of an employee or volunteer
- Disciplinary action against an athlete who alleges the action prevented them from making a “Q” time or elite team