Your Non- Profit needs D&O Insurance to protect you and its other board members!

D&O Insurance: Your Non-Profit needs it to protect you and its other board members!

So you recently were appointed to a Non-Profit Board of Directors in Columbia, SC.  Pretty exciting, right?  Now you can bring awareness and make a difference in your community for a cause you are passionate about.  But I’m guessing when you were thinking about the offer you did not consider the liability that you were assuming with the board appointment, or if you did, you thought I’m covered by my Personal Liability on my homeowner’s policy.  Well, we wish it was that simple.

You are assuming a true risk when you agree to sit on a non-profit board.  You are now part of a team that is running a “business” with the vendors, creditors, and benefactors of the non-profit looking to the board to make the best decisions on their behalf.  When an interested party feels that poor management decisions have been made by the board, they can sue the non-profit and its board of directors personally.

Directors  & Officers (D&O) insurance provides coverage for “intentional” actions taken by an organization’s board of directors or management that someone else thinks is wrong.  And as we all know, you don’t have to be guilty to be sued.  D&O Insurance provides defense costs coverage for suits even if the non-profit is not at fault.

Now I know what you are thinking, I’ve got personal liability insurance under my homeowners policy.  Well, you might want to check that really closely.  Some homeowners insurance policies protect insureds while serving on for-profit boards, but there is no coverage for not-for-profits or if your policy has the coverage it is limited.  Also, all board members may not have a homeowners policy; therefore, they don’t have any personal liability coverage.   For these reasons, it is important for the not-for-profit to find money in their operating budget for D&O Insurance.  For small not-for-profits, premiums can be as little as $750 per year.  Sounds worth it if you think about how expensive a lawsuit can be.

So I task you with finding out if the non-profit boards you sit on have D&O Insurance.  If they do, make sure you are a covered insured.  If they don’t, call Livingston Insurance or your trusted insurance agent to get a quote FAST.