Directors & Officers (D&O) Insurance for Non-Profits
What You Need to Know About
Directors & Officers (D & O) Insurance for Non-Profits
Since 1956, RJ Ahmann Company has been a premier provider of directors and officers insurance for non-profits nationwide.
Wondering if your nonprofit organization needs D&O insurance protection?
Lawsuits against directors and officers of non-profit boards of directors are increasing at an alarming rate. Whether a major social service organization or a local condo association, informed leaders realize they place their personal assets at risk by serving on a board of directors. As a result, they are becoming reluctant to service on non-profit boards of directors unless they carry insurance protection. Below you'll find all the information you need to make an informed coverage decision.
Which nonprofit organizations should have D&O coverage?
A surprising number of non-profits fail to maintain directors and officers liability coverage. If you answer "yes" to any of these questions, you should strongly consider D&O insurance for your non-profit.
- Are you organized as a corporation, trust, foundation or cooperative?
- Do you have outside board members?
- Does your organization work with the general public?
- Do you have employees?
- Do you accept contributions?
- Do you charge fees for membership or services?
Non-profit D&O Trends:
One of the largest areas of non-profit litigation is employment liability. Many underwriters attribute this trend to part-time and volunteer staffing and informal management styles that are prevalent in non-profit settings.
Claims based on membership complaints and mismanagement of funds are also seen with high
Why is D&O coverage important?
D&O coverage is of particular importance to nonprofit organizations because they usually rely on volunteer board members to make important decisions. Even when acting in good faith, these volunteer board members are subject to personal liability, placing their personal assets at risk in the event of a lawsuit. By recognizing this risk and providing solid D&O protection, you'll have a better chance of attracting and retaining quality board members. You'll also have a much better chance of weathering a wrongful act claim. Directors and officers coverage helps protect against financially devastating board member lawsuits resulting from decisions they have made. This coverage can and should be extended to cover employment practices lawsuits for allegations like discrimination and harassment.
How does it work?
A D&O policy provides coverage against "wrongful acts" committed by a board of directors. The following examples happen all too frequently:
- A youth hockey player is tragically injured in a game and the financially devastated family sues the association and its board members for financial damages, alleging inadequate rules and referee training to protect the players.
- A large donor disagrees with a financial decision and sues the board members of the non-profit organization individually for financial mismanagement of the organization.
- A community member with no direct association with the organization sues the board members individually due to a decision to eliminate a specific program.
The policy provides for payment of legal damages, as well as defense costs incurred by the individual board members. It can be extended to cover the entity itself. In addition, many D&O policies can be endorsed to include employment practices liability (EPL) coverage, protecting the board members and the organization in the event of harassment or discrimination allegations.
Can your non-profit afford directors and officers coverage?
More importantly, can your non-profit afford NOT to have D&O insurance? In today's litigious society, and particularly in challenging economies, lawsuits are an expected part of business — even in the nonprofit sector. In fact, most officers and directors face litigation at least once in their careers. If you're prepared with solid D&O protection, you'll be ready to overcome a legal challenge. If you're not, it could mean the end of your good works.
A smart solution
If you need D&O insurance, or if you just want to learn more, RJ Ahmann Company can help. With more than 50 years in the industry, we've helped hundreds of non-profits gain peace of mind with solid directors and officers protection. Our experienced D&O insurance experts will help you obtain comprehensive, cost-effective insurance coverage – tailored for your non-profit's unique needs. We represent a variety of "A"-rated carriers so you can rest assured that your good cause and your board members are protected with stable, reliable coverage. And, we'll provide the information you need to present the options to your board, so it's clear that you're working in the organization's best interest.
- We make it easy for you to find and obtain comprehensive, affordable coverage.
- RJ Ahmann Company has a preferred partnership with many leading D&O carriers, which means that you receive the attention and the rates you deserve.
- We'll help you educate your Board about the need for D&O, and explain the best options.
- You'll receive expert advice and ongoing collaboration with RJ Ahmann Company as your insurance partner.
- You'll receive adequate coverage and proper limits without investing a lot of time. We take care of insurance so you can take care of the communities you serve.
To ensure that you get the strongest insurance protection at the best rates, we...
- Take the time to really understand your organization and ask the right questions to ensure you receive the right coverage for your unique needs.
- Help you understand and avoid the exposures unique to your organization, so you're never left vulnerable to unexpected coverage gaps.
- Develop smart, strategic and affordable plans to protect your non-profit from potential D&O claims.
- Provide expert advice, answering all of your questions and collaborating with you as a year-round resource.
- Offer a much higher level of understanding and expertise than you'll find through your local insurance agent.
Ready to learn more? RJ Ahmann Company is ready to help with D&O insurance solutions tailored for your non-profit business!