Is Your Nonprofit At Risk?
On October 19th the new Mint Museum in Uptown Charlotte hosted the Wells Fargo Nonprofit Leader Summit. It was a great morning for networking and learning! Presentations on a variety of topics ranged from how to maximize donors during difficult economic times as well as the state of corporate donations and grants both in Charlotte and nationally. One topic not often discussed is the need for Directors and Officers (D&O) liability insurance.
For many years, nonprofit organizations along with the directors, officers, trustees, executive directors, committee members, employees and volunteers were protected from liability by the charitable immunity doctrine. However, many states have overturned at least part of this law.
As was described by Elizabeth Olsson, Senior Vice President and National Practice Leader for the Strategic Executive Risk Team, Wells Fargo Insurance Services, D&O insurance is important for a nonprofit organization to carry in order to have protection against potential damages, judgments, settlements, and defense expenses.
So, why is it important for your organization to purchase a D&O policy? The reasons include:
- Protection of the personal assets of directors and officers during lawsuits.
- Protection of the financial assets of the organization.
- Attracting and retaining qualified outside directors
While an umbrella policy might give an organization some protection, it is important for all organizations, both large and small, to review your coverage. Whether you are an executive director or a member of a board, it would behoove you to sit down with your insurance provider and make sure you have comprehensive coverage. This will help to give the proper protection that your organization might need should a lawsuit or judgment be rendered against you.