Do You Need Directors and Officers Liability Insurance?
Directors and officers (D&O) insurance protects decision-making executives and personnel in the event they are personally sued by investors, employees, vendors, volunteers, and other such parties. Directors and officers can be sued for any number of reasons, even those who serve a non-profit. To protect yourself and other board members from personal loss resulting from litigation, contact a non-profit insurance provider in New York City about D&O liability insurance. Here are a few facts that highlight the importance of obtaining D&O insurance.
Organizations of Any Size Can be Sued
It doesn’t matter how small your non-profit is, organizations of any size can be sued for wrongdoing. D&O liability insurance is especially helpful for small non-profits since directors and officers of small organizations typically don’t have the resources the successfully fight litigation on their own, namely time and money.
General Liability Insurance Usually Doesn’t Cover D&O Claims
Take a good look at your non-profit’s general liability insurance policy—chances are you’ll find that it doesn’t protect directors and officers in the event they are sued. Most general and umbrella liability insurance policies exclude D&O coverage, so be sure to add D&O insurance to fully protect yourself, your board, and your organization.
D&O Lawsuits are Expensive
It can be difficult for non-profits to justify the added expense of D&O liability insurance, but not when you consider the average cost to settle and/or litigate D&O lawsuits is $225,682. That’s just the average; some D&O lawsuits have exceeded $5 million. A D&O liability insurance policy is a small price to pay to protect yourself and your fellow board members from personal and financial ruin.
D&O Liability Insurance Attracts the Best Talent
If you want your non-profit organization to grow, you need to attract the best executive talent. Smart, savvy executives understand the personal risk they assume as directors or officers, which is why the very best and brightest will demand D&O coverage as a condition of serving your non-profit. Even if D&O insurance isn’t a condition of their employment, it tells prospective directors and officers that you care about protecting their personal assets.