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Robert W. Schmidt & Company
155 S. Executive Drive, Suite 204
Brookfield, WI 53005-4219
Toll Free: 800-361-4011
Phone: 262-790-4011

Atomic8Ball e-Newsletter

Non Profit Directors And Officers Liability And Employment Practices Liability

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 agencies.

The personal assets of the individual board members are at stake! Directors & Officers Insurance can help protect a board member's home, investments, or other personal assets.

Why to Buy D&O Coverage for Non Profit Organizations:

  • 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 D&O policy will ensure financial solvency to the organization
  • D&O 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 D&O policy is often under $1,000 with a $0 retention, yet the average cost of a claim is over $100,000.
  • D&O claims are not covered under General Liability or any other policy form.
  • Corporate scandals have heightened regulation of accounting practices.
  • The IRS has increased their scrutiny of Non Profits.
  • Directors of Non Profit boards have the same fiduciary duties as corporate board members. Non Profit D&O 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.
    • Duty of Obedience – requires Directors and Officers to ensure that the organization is run in accordance with its charter and bylaws, and that the organization complies with applicable laws.

Why to Buy EPLI for Non Profit Organizations:

  • EPLI covers not only actual but alleged acts of discrimination, harassment, retaliation and wrongful termination.
  • EPLI lawsuits can be brought by employees as well as volunteers or third parties.
  • The average cost to defend an EPLI claims is $150,000. The financial ramifications of not having EPLI 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 GL policy for such coverage is generally inadequate and erode limits of liability.
  • An employer is more likely to have an EPLI claim than a GL or Property claim.
  • 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.

Product Advantages:

  • Data & Security+ Endorsement – $50,000 sub-limit each for data breach, identity theft, workplace violence and kidnap expenses plus free identity theft services for directors and officers who become victims of identity theft (available in most jurisdictions)
  • Separate limits of liability for directors and officers and employment practices liability claims
  • Defense outside the limit
  • Lifetime occurrence reporting provision
  • Fair Labor Standards Act (FLSA) $100,000 sub-limit for defense costs and loss (available in most jurisdictions)
  • Third party harassment and third party discrimination coverage
  • Punitive damages where insurable by law (most favorable venue wording) are included automatically
  • Coverage for both monetary and nonmonetary claims included
  • Defense and settlement provision (hammer clause) – 75/25 in favor of the insured
  • Individual director or officer payment protection "order of payments"
  • Breach of contract coverage
  • Pre/post judgment interest included in the definition of loss
  • Outside directorship liability coverage
  • Excess Benefit Transaction Excise Tax Coverage – $20,000 sub-limit (available in most jurisdictions)
  • Optional Fiduciary Liability Coverage
  • Risk Management Services – Free human resources consultation helpline service with unlimited calls and no time limits plus an online HR resource center
  • Free and substantially discounted background check services
  • Standard form option (available in most jurisdictions): Combined directors and officers and employment practices liability limit, defense inside the limit, not employment practices management services and excludes coverage for Data & Security+, Fair Labor Standards Act and Excess Benefit Transaction Excise Tax

Targeted Classes of Businesses

Assistance Center Lending Organization
Assisted Living Center Library
At-Risk Youth Facility Lobbyist
Big Brothers/Sister Low Income Housing
Boarding School Membership Organization (Elks, Jaycees, Business Association, VFW)
CASA Mental Health Center
Cemetery Montessori School
Chamber of Commerce Museum
Charity Group Nursing Home
Charter School Performing Arts Organization
Church/Temple/Synagogue Political Action Committee
Clinic Preschool
Community College/Junior College Private Industry Council
Convention Center Private School
Country Club Professional Associations
Crisis Center Public Broadcasting
Day Care Center Regional Planning Commission
Developmentally Disabled Facility Research Organization
Dining Club Retirement Home
Economic Development Corporation Scouting Organization
Environmental Group Social Service Organization
Exhibition Swim Club/Tennis Club
Food Bank Trade Association
Foundation United Way Chapter
Golf Club Visitors/Tourist Bureau
Handicapped Service Vocational Training/School
Health Care Provider Water Company
Historical Society/Preservation Yacht Club
Homeless Shelter YMCA/YWCA
Hospice Youth Sports Association
Humane Society Zoo

Please click here for A Non-Profit D&O and EPLI Application


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Check out our website or give us a call for an application today!