No good deed goes unpunished. In today’s litigious society, serving on a Not-for-Profit board of directors can expose individual members to unexpected legal, and financial responsibilities should someone take exception to or legal action against an organization. A good D&O policy can be a Not-for-Profit’s best friend for protecting its board members and freeing them to do their jobs without fear. Here are 11 reasons why Not-for-Profits should get D&O coverage.
- Reduce liability exposure to the board, officers and organization.
- Cover risks that a general liability policy cannot.
- Protect an organization from the high cost of legal defense for “wrongful actions.”
- Keep operating funds for operations.
- Enhance the defense while reducing the potential recovery by a claimant.
- Remove a barrier to recruiting top board members.
- Give board members the security to make the tough decisions.
- Get employment practices support and education for board and officers.
- Take advantage of a third-party review of employment practices, policies and procedures.
- Choose riders that suit an organization’s particular needs.
- Protect against claims of breach of contract.
Remember, one doesn’t need to be guilty or even in the wrong to require a defense. One in 100 Not-for-Profits face legal action in this country every year. Few have extra cash on hand to pay for legal bills. That makes a D&O policy a good investment for an organization.