directorofficer

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Directors and Officers Insurance for Nonprofits?

• Why do directors and officers (DO) of nonprofits
  need insurance??

2
What is a nonprofit?

• A nonprofit is a tax-exempt organization that
  exists to provide social services. Nonprofits
  often run on donations or are self-funded, and
  the funds are intended to be used to further a
  specific social cause.?
• Not all not-for-profit organizations are
  technically nonprofits.?

3
Examples of nonprofits

• Amnesty International?
• Better Business Bureau?
• Boy Scouts of America?
• Cato Institute?
• GlobalGiving?
• GGIP?
• The Nature Conservancy?
• PBS?
• Red Cross?
• The Rotary Foundation?
• Special Olympics

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Who are the Directors and Officers ?for
Nonprofits?

• The actions taken by nonprofits are often decided
  by a board of directors and officers.?
• The board can consist of a small group of
  founders, or it can be hired directors and
  officers, or a mix.?
• Regardless, these people are liable whenever
  things go wrong.

5
The Most Important Policies for Directors and
Officers Insurance for Nonprofits

• There are multiple areas to cover in DO
  insurance, but the most important policies are
  the following

6
Employment Practices Liability

• This is arguably the most important area of
  coverage.?
• According to Nonprofit Quarterly, 94 of the
  claims dollars under a DO policy come from
  employment practices allegations.

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The most common types of employment practices
claims are the following

• Sexual harassment?
• Racial and gender discrimination?
• Retaliation, including against whistleblowers?
• Defamation?
• Failure to accommodate as per Americans with
  Disabilities Act ?
• Improper employee classification?

8
Governance Liability 

• This covers the types of allegations made against
  the board of directors and officers of nonprofits
  which a basic DO insurance policy couldnt
  cover. ?
• More specifically, it would be required in
  various conditions of alleged organizational
  malpractice or internal or external legal
  mishaps, accidental or otherwise.

9
Governance claims include the following

• Breach of contract ?
• Improper board elections.

10
Fiduciary Liability

• Similar to governance liability, but more
  pertaining to misuse of funds or financial data.
  ?
• This is an important type of coverage to keep in
  place, as fiduciary allegations are serious and
  could jeopardize the longevity of your nonprofit.?

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Fiduciary claims include the following 

• Attorney general investigations?
• Improper fundraising allegations?
• Improper reporting of revenue?
• Mishandling of donations?
• Failure to report payroll taxes

12
More Policies for Directors and Officers
Insurance for Nonprofits

• General Liability Insurance?
• Business Owner's Policy?
• Professional Liability Insurance?
• Workers Compensation Insurance

13
The Best Companies for DO Insurance include

• Best overall Travelers ?
• Best for small businesses Hub International ?
• Best for nonprofits Affinity Nonprofits ?
• Best for high policy limits The Hartford ?
• Best Startup DO TechInsurance

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