Addressing the D&O Liability Exposures of Nonprofits
Directors and officers (D&O) of nonprofit and social services organizations face virtually the same exposures to lawsuits as do their for-profit counterparts. Directors and officers, many of whom are volunteers, as well as the organization itself, can be sued for alleged wrongful acts, or mismanagement of the organization or its resources.
The majority of claims against directors and officers involve employment practices allegations regarding harassment, discrimination and wrongful termination. In fact, according to data released by the Nonprofits Insurance Alliance Group, in any given year approximately one in 25 nonprofits will have a D&O claim against them, nearly all of them employment-related.
Putting D&O Insurance on a Nonprofit’s Agenda
Directors & Officers Liability insurance is designed to defend directors and officers and pay any resulting money damages, up to the policy’s amount. Our professionals at BMT Insurance Advisors can provide you with a competitive, comprehensive D&O solution for nonprofits. We offer a broadly written D&O Liability policy that protects board members and the organization itself from allegations involving employment practices, fiduciary liability and mishandling of employee retirement funds including ERISA, among other mismanagement liability claims.
Prior Acts also are covered under a broadly written policy, and the cost of legal defense can be included without reducing the available limits of coverage. Coverage limits typical for nonprofits range depending on the organization’s asset size.
Today’s tenuous legal environment requires a proactive approach in covering nonprofits and social services for your D&O exposures. The degree of D&O exposure is based on many factors including whether the organization is operated as a corporation, trust or association, whether it is exempt from federal income tax as either a private foundation or public charity, and the number, wealth and degree of interest of the organization’s constituents. BMT Insurance Advisors is poised to assist you realize the reality of your exposure, and the need for strong enterprise risk management and insurance solutions.