You may be turning heads and making things bright through your successful administration of a nonprofit organization. But for your all your good works and good intentions, you must know as well that financial ruin could be just around the corner. The Directors and Officers of any organization, whether it be a major public corporation like General Motors, or an inner city not-for-profit promoting early childhood care and education, can be sued for ruinous sums in a court of law, over sexual harassment, negligence, even an auto accident involving a volunteer. No matter how little involvement or how outrageous the claims, the damage to you and your organization could be intolerable. Liability insurance for directors and officers, usually called D&O insurance, has come into being to meet this urgent need.
Dozens of carriers offer D&O and with names like Great American, Monitor, or USLI through local agencies, professional help is the only way to pick your way through to the lowest cost solution. Not for profits are especially pressed to find low cost insurance solutions, when insurance costs chew up a major portion of the not-for-profit’s budget. A successful insurance program will cover risk management, risk analysis, and crisis management services. Insurance should be able, for instance, to obtain the skilled legal help to stop a plaintiff before they ever get you into court – your best protection and the most likely outcome – when you have the right, cost free, risk management tools.
You cannot expect to be an expert in the legal issues and costs involved in D&O insurance. You must consult with a trained professional, who can apply their knowledge of your business to discover the best D&O insurance to protect you and other officers and directors from the kind of liability risks that your organization is likely to encounter. D&O insurance professionals will help to explain the consequences to your organization of operating without insurance.
If not for your own protection, you must consider the welfare of the men and women who have worked hard to gain expertise and an outstanding reputation in the community to be considered for a position as a director or officer of a not-for-profit. The sound decision making that has made them community leaders is not characterized by risking disaster. Is it fair to leave them uninformed as to the risk they are taking should they participate as a director or officer of an organization that does not carry D&O insurance? Then it is self-evident, all not-for-profits must carry this insurance, else no one would agree to lead them.
Following on the necessity of D&O insurance, what you pay and what kind of coverage you have is every bit as important as whether you have insurance. There are literally thousands of possible insurance policies to choose from, and not every not-for-profit requires the same coverage. Making this decision with the guidance of a trained insurance broker is the only way to find the coverage at the right cost. In today’s world of rapidly changing regulation, the up-to-date knowledge and worldwide communication network of a professional insurance broker can guide you to a successful D&O insurance program, a decision you can defend with confidence that you have found the right coverage and cost to meet your organizations insurance needs.