Property insurance can protect your nonprofit organization should you experience a fire flood, or another natural disaster. General liability insurance is key if volunteer trips and suffers a fracture at your offices. D&O insurance may prove invaluable for a wider range of unanticipated events, such as the following scenarios. If you do not currently have directors & officers liability insurance in New York City, talk to a nonprofit insurance company about getting this essential coverage product.
Breach of Contract
D&O liability insurance could be critical for a number of circumstances. One common situation is legal action taken by a partner with whom your nonprofit does business. Nonprofits often foster relationships with other organizations that can help them further their goals. In some cases, it may be another nonprofit with similar objectives. It may also involve a vendor that offers its products or services at a reduced cost. If a company or organization believes that you’re nonprofit violated a contract, it may file a lawsuit against your organization.
Member misconduct can involve many alleged indiscretions ranging from discrimination to mismanagement. Nonprofit D&O liability insurance is the very type of insurance coverage necessary when any claims of misconduct are made against someone who is a board member for your nonprofit. Given the considerable damages that may be sought for circumstances involving discrimination or wrongful termination, it’s important to have D&O insurance to protect the financial interests of your nonprofit.
Misuse of Donations
Nonprofits are often only as effective as the donations they can raise toward their goals. Donations serve to pay the wages of the employees that work at your nonprofit, further research for your cause, and even fund events to gain greater awareness of your nonprofit’s mission. Should any person suspect that the donations given to your nonprofit are being used for objectives that do not support the aims of your organization, a lawsuit may result. In such cases, D&O liability insurance can offset the costs of defending your nonprofit and its board members against such claims.