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What type of insurance coverage do you need?

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Nonprofit organizations provide essential social services that benefit the community and their members. These organizations cannot survive without a Board of Directors to make major decisions on behalf of the organization. Even when acting in good faith, Directors and Officers of Nonprofits expose themselves to risks with each decision they make on behalf of their organization. In the event of a claim, Nonprofit leaders could suffer severe damage to their reputation and personal finances simply based on their decisions. In order to protect themselves, Director & Officers Insurance for Nonprofit leaders is crucial and can provide the following benefits:

 

1. Legal cost reimbursement

D & O policies can provide defense cost coverage for a variety of claims including legal cost reimbursement to Nonprofit leaders following allegations of wrongful acts, financial mismanagement, errors in judgement or negligence. 

 

2. Entity coverage

Some D & O policies go beyond protecting Directors and Officers and extend to the organization.

 

3. Flexible limits

Most insurance companies offer a variety of coverage limits for D & O policies. In some cases, these limits can go as high as $10 million, depending on the size of the Nonprofit.

 

4. Protection beyond indemnification

 While the bylaws of many of nonprofits require the company to indemnify and defend directors and officers who are sued, leaders shouldn't expect this protection to be sufficient. This is because a nonprofit's duty to indemnify is only as good as its ability to pay. This means that, if a nonprofit is insolvent or not financially stable enough to cover the legal fees, Directors and Officers would have to cover these fees themselves. 

  

5. Peace of mind

D & O Insurance ensures that nonprofit leaders are protected regardless of where claims originate, providing effective ad timely coverage.

 

Board Members can be held liable for the actions of the Nonprofit Organizations they serve. In order for a nonprofit to protect its company missions and its Board Member's personal assets, D & O Insurance is crucial. 

 

Contact Carriage Trade Insurance to learn more about our Directors & Officers Insurance options.

 

Posted 12:51 PM

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