Directors & Officers
Liability Insurance is designed to help protect
both the assets of your company and the personal
assets of the individuals.
Persons who are Directors,
Trustees, and Officers of any nonprofit
organizations are subject to personal liability
and lawsuits due to the actions taken by the
Board of Directors. Nonprofit directors and
officers liability insurance is transfer many of these loss exposures to
another party (an insurance company).
Many actions by persons within
the nonprofit organization can trigger a lawsuit
in today's legal climate. Most Directors & Officers claims against
nonprofits involve improper employment related
practices, such as wrongful termination,
discrimination, breach of contract, and sexual
harassment.
Suits may also be brought by any of the
following:
- Beneficiaries, who feel that they were either
denied benefits of the nonprofit or received
less than they were entitled to receive.
- Donors, who allege that their contributions
are either being wasted or are not being used to
advance the purposes of the organization, as
stated in its charter.
- Any outside party or parties, who claim Libel,
Slander or Plagiarism due to the content of any
presentation or publication by the organization.
- Board members who sue other directors and
claiming misinterpretation of the charter (such
as improper decisions regarding what funds and
services are to be provided to the public) or a
conflict of interest.
- State attorney generals, alleging
mismanagement or antitrust activity.
The Directors and Officers of
nonprofits are subject to duties of loyalty,
obedience, and diligence. In recent years, many
states have enacted legislation designed to
eliminate or reduce the liability exposure of
nonprofit organizations and their directors,
officers, employees, and volunteers. However, none
of the state laws apply to liability that arises
out of federal statutes, such as the Civil Rights
Acts and the Americans With Disabilities Act.
Moreover, the state laws themselves are still
subject to judicial review in many cases.
The "insured" in the
most comprehensive policies includes both the
nonprofit itself and its subsidiaries, plus its
directors, trustees, officers, employees,
volunteers, committee members and spouses of
directors & officers. The protection applies
to wrongful acts done.
The main benefit of all
Directors & Officers Liability policies is not
necessarily that the insurance company will hire
an attorney for any lawsuit, but they will pay
defense costs whether or not a judgment or
settlement results from the litigation. Defense
costs can and will destroy any organization.
For more information, contact:
Brian Wilbur
Pacific Insurance Partners
2328 Pacific Ave,
Forest Grove, OR 97116
Phone: 503-357-7111
Fax: 503-359-0340
Email: brian@pacificinspartners.com
Website: www.pacificinsparnters.com
