Why To Buy Directors and Officers Coverage
For Non Profit Organizations
- Non Profit Director and Officer boards can be sued by donors, employees (prospective,
current or former), the general public, third parties, clients, and/or government
- The personal assets of the individual board members are at stake! Directors &
Officers (D&O) insurance can help protect a board member's home, investments,
or other personal assets.
- The bylaws of the Non Profit may indemnify the Board but does not guarantee the
entity has the resources to fund the cost of a claim. The financial backing of a
Directors & Officers policy will ensure financial solvency to the organization.
- Directors and Officers lawsuits can have a devastating impact on the operating budget
of the Non Profit organization, and can even put the entity out of business.
- The average cost of a Directors and Officers policy is often under $1,000 with a
zero retention yet the average cost of a claim is over $100,000.
- Directors and Officers claims are not covered under General Liability or any other
- Corporate scandals have heightened regulation of accounting practices. The Sarbanes-Oxley
Act has also impacted Non Profits.
- The Internal Revenue Service has increased their scrutiny of Non Profits. Over 400
private foundations have been audited in the past year.
- Directors of Non Profit boards have the same fiduciary duties as corporate board
members. Non Profit Directors and Officers lawsuits may involve a variety of issues
related to the daily operations of the board including:
- Duty of Care - requires Directors and Officers to act prudently and reasonably in
regard to the management of the organization's affairs
- Duty of Loyalty - prohibits Directors and Officers from using their position in
the organization to further their own personal interest
Why To Buy Employment Practices Liability
For Non Profit Organizations
- Employment Practices Liability covers not only actual but alleged acts of discrimination,
harassment, retaliation and wrongful termination.
- Employment lawsuits can be brought by employees as well as volunteers or third parties.
- The average cost to defend an employment claim is $150,000. The financial ramifications
of not having Employment Practices Liability Insurance can be crippling to the operations
of a small non profit.
- Non Profits are not protected under Commercial General Liability for employment
lawsuits. Endorsements to a General Liability form for such coverage are generally
inadequate and erode limits of liability.
- An employer is more likely to have an employment claim than a General Liability
or Property claim. Six out of ten companies have been named in a discrimination
or harassment lawsuit in the past five (5) years.
- Recent Supreme Court rulings have held that employees may win discrimination suits
without direct evidence of an employer's illegal intent.
- Age discrimination lawsuits continue to be on the rise as the baby boomer generation
ages and remains in the workforce.
- The 1991 amendments to the Civil Rights Act give employees the ability to seek jury
trials, damages for mental anguish and emotional distress, and obtain punitive damage
- Three out of five former employees sue their employers every year.
- Approximately 550 employment lawsuits are filed every day in the United States.
Need a quote? We'll get it to you fast!
Check out our
website or give us a call for an application today!