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How D&O Helps Non Profit Organizations

Common misconceptions about who benefits from Directors and Officers policies may leave many non profits and their leaders vulnerable to claims of wrongful acts. Non-bodily injury may be an exposure for any organization. Directors and Officers for non profit companies works to protect an organization in the same way it does for large and public corporations: it allows leaders and members to do their jobs without the threat of debilitating financial loss by a claim of wrongful acts.

Protects Against Claims of Error

While general liability coverage may cover bodily injury and physical damage or loss, D&O comes into play when a claim is made that involves an actual or alleged error or omission, mismanagement of funds or a dispute over employment practices. Even if unfounded, legal fees associated with such claims may be costly. Directors and Officers for non profit companies typically protects from three angles:

  • Side A coverage: guards against loss of personal assets
  • Side B coverage: allows for reimbursement to organization for fees involved with a claim against an officer
  • Side C coverage: insurance for the non profit company itself when it appears as a defendant in a proposed lawsuit

Supports Leadership

D&O for non profits is coverage that allows people to do the jobs they are engaged to do without worrying about personal financial loss due to legal fees from claims of misconduct or mismanagement.