What is Non Profit Directors and Officers?
Non Profit Directors and Officers (D&O) insurance helps protect board members, officers, and the organization itself from claims made against them for decisions and actions taken in their official roles. It covers legal defense costs, settlements, and judgments resulting from allegations of mismanagement, negligence, or breach of duty.
Who Needs It
Any nonprofit organization with a board of directors or advisory committee should consider D&O insurance. This includes charities, foundations, educational institutions, religious groups, and community organizations. Even unpaid volunteers making strategic decisions can be held personally liable for their actions.
What It Typically Covers
D&O insurance commonly covers:
- Claims of mismanagement of funds or assets
- Allegations of wrongful acts or breaches of fiduciary duty
- Employment-related claims such as discrimination or wrongful termination
- Legal fees and defense costs, even if the claim is groundless
Coverage usually applies to past, present, and sometimes future directors, officers, and other board members.
Common Exclusions and Limitations
D&O policies often exclude:
- Fraud or criminal acts
- Personal profit or advantage gained illegally
- Bodily injury or property damage (covered under general liability)
- Claims already known before the policy began
Be sure to review your policy details for specific exclusions and conditions.
Factors That Influence Cost
Several factors affect the cost of D&O insurance for nonprofits, including:
- Size and annual revenue of the organization
- Number of employees and volunteers
- History of prior claims or lawsuits
- Scope of activities and level of public exposure
- Strength of internal controls and governance practices
Each insurer evaluates risk differently, so premiums can vary.
Proof of Insurance & Compliance
Many grantors, lenders, or government agencies require nonprofits to show proof of D&O coverage. While not required by law in most states, having this insurance can demonstrate responsible governance and help attract qualified board members. Always check with your legal advisor or state nonprofit association for local compliance requirements.
How to Get a Quote
Getting coverage is simple. You can start your quote online and customize your policy based on your organization’s needs. Get a quote today.
Frequently Asked Questions
Does D&O insurance cover past board members?
Yes, most policies include coverage for former directors and officers for actions taken during their time of service.
Is D&O insurance only for large nonprofits?
No, even small nonprofits can face claims. Any organization with decision-makers can benefit from this coverage.
Does D&O insurance cover lawsuits from employees?
Yes, many policies include employment practices liability, which covers claims related to wrongful termination, harassment, and discrimination.
Can volunteers be covered under a D&O policy?
Certain policies extend coverage to volunteers acting in a leadership capacity. Check your policy details to confirm.
Is D&O coverage the same as general liability insurance?
No, D&O covers decisions and actions by leadership, while general liability covers physical injuries and property damage.
Still have questions? Talk to a local insurance expert.