Directors And officers Insurance
Directors And Officers Insurance Explained
Many nonprofit organizations don’t consider purchasing D&O insurance. They feel that these insurance policies are an unnecessary expense. However, the painful sting of litigation can particularly harm a nonprofit’s coffers.
Exactly what is Directos and Officers insurance? It is a form of commercial insurance that protects against a breach of duty by the Directors and Officers of nonprofits.
What Does Directors And Officers Insurance Include?
Nonprofit Directors and Officers insurance usually includes: “any actual or alleged act or omission, misstatement, misleading statement, error, breach of duty or neglect by an Insured Officer or Director in the discharge of his or her duties.
Here’s a brief guide to how Directors And Officers insurance can protect nonprofits.
Normal D&O Buyers
Usually, major corporations purchase Directors And Officers insurance to protect the board and officers. Since more and more nonprofits are being subjected to litigation, it’s becoming necessary for nonprofits to equip themselves with this insurance.
Let’s take one example. Let’s say that you’re a parent who is on your child’s local youth sports league committee. If another parent sues the committee, you can be held liable as a member of the board or committee!
Nonprofit Liabilities
Persons who accept positions of authority on nonprofits take on liability with regard to the nonprofit. Therefore, board members can be subjected to legal claims. Directors And Officers Insurance claims typically fall into the category of non-bodily injury claims.
D&O insurance provides comprehensive coverage for any mistakes, errors, or wrongful acts that one or more board members may commit. Insurance companies require that nonprofits send full by-laws and financial information before they assess a quote for the D&O policy.
The Importance of Claims-Made Coverage
All policyholders need to structure their policy so that they are covered for claims-made coverage. This means that the insurance company will pay for claims for lawsuits issued while the nonprofit possesses the policy.
Directors And Officers Insurance Protects Against Frivolous Lawsuits
It’s also in your best interest to get an Extended Reporting Period. This will help provide extensive coverage for your company. Tail coverage is good so that you can be sure you’re protected from frivolous lawsuits filed at inopportune times.
Researched from Ratelines.com, find great insurance rates and other money market rates.
Directors and Officers Insurance is highly recommended for all non profit organizations.