insurance for nonprofit boards
Like other types of insurance, directors and officers insurancefornonprofit organizations mitigates any financial risks that could impede operations. When selecting the appropriate D&O insurance policy for your nonprofitboard members, there are several factors to consider. First and foremost, you need to ensure that your policy provides adequate coverage for the specific risks that your board members face.
Understanding the Context
This insurance offers financial protection for board members against lawsuits or wrongful act allegations. It covers defense costs, settlements, and judgments. Securing D&O insurance ensures the stability and continuity of nonprofit operations. For example, NPQ says the directors of a nonprofit nursing home were found personally liable for breaching their duty of care for failing to remove the organization’s CFO and administrator once it became apparent that they were mismanaging the organization.
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Key Insights
In today’s tight economic environment, nonprofits are facing tough budget decisions, and one expense that often comes up is D&O insurance (Directors & Officers liability insurance). How should a board of directors think about this insurance? Some statistics from our 10,000 insured... Chapter 1: InsuranceforNonprofitBoards and Officers.Damages in excess of $500,000 were sought. Shaken, the board turned the lawsuit over to its insurance broker, expecting that the center’s General Liability insurance carrier would defend the nonprofit in its lawsuit.
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Although Directors' and Officers' insurancefornonprofitboards can’t prevent claims from happening, it can mitigate the high costs of defending against those claims while protecting board members’ personal assets.
