Does Your Non-Profit Board Carry the right D&O Insurance?
In today’s business climate of corporate transparency and accountability, an organization’s officers and directors face a myriad of employment-related exposures. Sarbanes-Oxley regulatory mandates and shareholder activism mean directors are more frequently at risk, translating to rising claims and escalating settlement costs.
In the wake of unprecedented corporate scandals in recent years, clearly the trend of corporate accountability applies to large corporations. But privately held companies, including nonprofits, are not exempt from litigation arising out of the management decisions of their boards. They, too, are at risk.
Making sure the nonprofit board that you serve on carries the proper directors and officers insurance needs to be a critical factor in your decision to serve on that board. It is important to understand that your personal assets on the line should you be accused of negligent acts. That being said, it is time for directors and officers to take steps to protect themselves and not rely solely on the coverage that is provided to them. A suitable solution to protect your assets is a personal directors and officers insurance policy. Regardless of if you sit on one board or many this policy would act in as an additional layer of protection and provide coverage for you personally once the D&O limits of the nonprofit are exhausted.