As a director or officer of a non-profit organization, you face a unique set of risks and can be held personally liable for many financial activities. While that may sound daunting, maximizing your coverage and minimizing your liability with Directors’ and Officers’ (D&O) coverage can help protect you.
What is a D&O policy?
Directors’ and officers’ insurance protection covers “wrongful acts” such as an alleged error, omission, misleading statement, neglect or breach of duty. This insurance coverage provides defense costs and indemnification coverage for these acts. Unlike personal and commercial liability policies that cover claims arising from bodily injury and property damage, D&O coverage fills the coverage gap.
How are you at risk?
If you sit on a non-profit board, you are at risk if you cause an alleged or actual negligent act, error, omission, or misleading statement. If found guilty of misconduct, that places your personal assets at risk. Here are some examples:
- Mismanagement of grant funds.
- Judgment errors including misleading statements or improper guarantees.
- Failing to implement appropriate oversight or control to deter fraudulent activities.
- An employee alleges sexual misconduct or harassment.
How can I protect myself as a director / officer?
If you are on the board of a non-profit, you should add Not-for-Profit Directors and Officers Liability Coverage to your personal umbrella policy. If it is not available, you should consider securing a separate policy on your own or remarketing your coverage with a premier carrier that provides that add-on coverage.
An insurance advisor at Sterling Coverage can help review your insurance coverage to ensure that you are appropriately protected. Please reach out to us with any questions!