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Insurance For Non Profits
Non Profit Liability Insurance Quotes
People who work in nonprofit organizations often develop a special bond with the organization, its mission, and the people with whom they work. This makes any type of legal action very different from what might occur in a for-profit company. However, a lawsuit is still a lawsuit. If all attempts at mediation fail, you will have to go to court, where someone will win and someone will lose. This is why non-profit insurance is necessary.
Does Our Nonprofit Board Need Liability Insurance?
Your board members are volunteers who often make difficult decisions. They should have D&O insurance to protect them. Not having such insurance can make it difficult to attract and retain good board members, who simply cannot afford to serve if they run risk to their personal assets.
Although the fact that your organization is incorporated with the state protects your board from the financial liabilities of the organization, it does not protect them from legal actions that might by brought against them directly.
Members of the board and/or officers of your nonprofit could be sued individually or as a group. People can even sue your organization in regard to issues such as discrimination (racial, sexual, religious, age, and sexual-orientation). Board members and officers can be included in these suits.
Directors & Officers (D&O) Non Profit Insurance Claims
D&O insurance protects nonprofit organizations when claims arise from allegations that damage resulted from policy decisions made by the board of directors or from actions by the board and volunteers based on those policies. These damages are considered to be the result of wrongful, intentional acts rather than mere negligence.
About 90 percent of D&O suits against nonprofit organizations are employment related. These lawsuits include wrongful termination, sexual harassment, and age, sex, or race discrimination. Most of the remaining 10 percent of D&O suits deal with allegations that the board of directors committed a breach of their fiduciary duty to appropriately use and protect the organization's assets and resources.
All non-profit organizations, regardless of whether they have any employees, must carefully consider their exposure to this particular risk. The accusations may be directed against the entire group or against individual members of the group and may come from donors, concerned citizens, or government officials.
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