What Does Nonprofit Directors Officers Insurance Cover?

The number of insurance policies available to nonprofits can seem overwhelming when first deciding what to purchase, and it can be difficult to determine what you really need. Nonprofit directors & officers insurance is one type of policy that is very important for the financial well-being of your organization. Here is what it covers.

What Is Covered

Because many nonprofits have limited resources, responsibility for expenses can pass to those in leadership positions when someone sues the organization. D&O insurance protects their personal assets by covering the cost of legal defense as well as any judgments for damages. Examples of covered claims include the following managerial actions:

  • Negligence
  • Wrongful acts
  • Errors in judgment
  • Bad advice

What Is Not Covered

While D&O insurance provides a safety net for those working in the best interest of the organization, it does not protect them from willfully bad behavior. For example, it does not cover any of the following:

  • Dishonesty or fraud
  • Deliberate criminal actions
  • Bodily injury to another person
  • Damage to a third party’s possessions

D&O insurance over $1,000,000 is available, so those in managerial positions do not have to worry about being held personally liable for lawsuits against the company. By purchasing this policy you make working for your organization more attractive.

 

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