How D&O coverage can protect your board of directors


The board of directors for a non profit plays an influential role in the organization — and ultimately in the community — by making decisions about funding, programs, and more. As a result, board members face unique liability risks. Non-Profit Directors and Officers (D&O) coverage is designed to meet those risks.

A D&O Liability policy protects the organization against claims arising from wrongful acts, misleading statements, breach of duty by a director, officer, or trustee, and other similar causes.

For example, say a donor made a contribution to a non profit and intended the funds to be used for an educational program. The non profit felt it needed a larger building to continue serving the local community, and instead used part of the donation for an expansion. The donor, in turn, filed a lawsuit for this use of the funds. If the non profit had a D&O insurance policy in place, the insurance company would defend them in this lawsuit.

Protection for your board
Most importantly, D&O liability covers the costs to defend a lawsuit against your non profit. Without coverage, the defense costs could be unmanageable — especially in today’s litigious society, as claims against non profits continue to increase.

Plus, having this coverage potentially can help you recruit new board members. Volunteers will want to confirm that D&O liability is in place before agreeing to serve.

Security for your board members
Your personal assets are tied to your volunteer actions. Board members could be named in the suit against the organization, putting those assets at risk. This coverage can help make sure all members are protected.

For more information or to set up a D&O policy, talk to your insurance agent or contact SECURA at 608-824-3462. 

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