The Benefits of Getting Directors and Officers Insurance
Directors and Officers liability insurance, or D&O, is one of the types of coverage your nonprofit should look into purchasing in order to your protect board members. Directors & Officers (D&O) liability insurance helps cover the defense costs, settlements and judgments arising from lawsuits, and wrongful act allegations brought against a nonprofit organization. Often, nonprofits may not realize that their board members may be held personally liable for the actions of the organization.
Not having adequate coverage for a claim filed against a board member can leave you and your board member with crippling legal costs. Based on data from the Nonprofits Insurance Alliance Group, legal costs for a D&O claim average approximately $35,000. Settlements average $28,000. In fact, based on their data, one out of ten D&O claims will cost over $100,000! Is that a risk that you’re willing to take?
So, now that we’ve convinced you that Directors and Officers coverage is important, let’s look at how to go about making the best purchase for you. You should realistically examine what your organization’s specific needs are. Talk to a knowledgeable agent and review what the different policy providers have to offer. In reviewing policies, you’ll want to ask questions about deductibles, policy limits, how defense funds are financed, and does it cover employment practices. Finding an agent you trust to help you navigate comparisons across the different policy providers can be especially helpful.
Make sure you ask questions and completely understand what your coverage is. Directors and Officers insurance doesn’t cover everything. For instance, tax liabilities and criminal acts can’t legally be covered under these plans. Additionally, claims like slips and falls, cyber liability, property coverage, and more are not covered under these policies. Discuss the coverage with an agent you trust to insure this policy meets all of your needs. You may need to consider additional types of nonprofit insurance.
In summary, this insurance coverage is a must have for most nonprofit organizations and should be considered a priority. Don’t leave yourself, or your members unprotected needlessly!
For more information, contact local insurance agent, Sandi Purinton with The Insurance Connection. We offer the benefits of an independent agency and carefully consider your individual insurance needs. The Insurance Connection finds the right coverage for the best price for you, all with a smile. Contact us today to get a free insurance quote.
This material is for information only and is not intended to provide legal or professional advice. You are encouraged to consult with your own attorney or other expert consultants for a professional opinion specific to your situation. This information is only a general description of the available coverages and is not a contract. In an effort to keep your policy coverage affordable, the actual policy contains certain limitations and exclusions. Please refer to your insurance policy for the pertinent contract language and coverages. Some coverages and discounts are not available in all states. The Insurance Connection welcomes all applications, without regard to religion, race, color, national origin, sex, handicap or familial status.