Non-profit organizations do a lot of good for a lot of people, but that doesn’t mean can’t be sued or held financially responsible for loss or personal injury. For the men and women who oversee these organizations, directors and officers insurance (D&O) provides protection against litigation and personal financial ruin. D&O insurance policies in New York City can be customized to suit your needs and the needs of your organization, so work closely with an insurance provider and ask the following questions to make sure you get the right level of protection.
What are the Defense Cost Provisions?
All D&O insurance provides coverage for defense expenses, but how defense cost provisions are provided to policyholders varies from policy to policy. Some D&O policies provide that defense costs and expenses will only be reimbursed after the matter is resolved, while others provide that defense costs and expenses are only reimbursed on a periodic basis. A policy that “advances” defense costs on a current or quarterly basis will pay defense costs and expenses as they are incurred.
Is Coverage Still Available in the Event of a Merger or Acquisition?
“Tail” policies are generally available to provide coverage in the event of a merger or acquisition until the end of the policy period. Some D&O policies have automatic tail coverage available after an acquisition, while others may need to be negotiated. Ask your NYC D&O insurance provider about tail policies and specific terms of coverage.
Can Anything be Done to Expand the Claims Covered by D&O Insurance?
Many insurers offer endorsements that broaden the definition of a “covered claim,” which typically is defined to mean letters, civil complaints, and formal administrative or regulatory proceedings. Check with your provider to find out if expanded claim endorsements are available to cover arbitration, criminal indictments and investigations, subpoenas, and other claims.