Do all nonprofit organizations need Directors and Officers Liability Insurance?
The following article is a summary of an NPCC workshop on the topic of whether or not an organization should carry Directors and Officers (D&O) insurance and what the NPCC plan offers. NPCC members can obtain a low-cost comprehensive policy through a program administered by Frank Crystal Financial Services and underwritten by National Union Insurance. NPCC’s past president, Peter Swords has been involved with the issue of D&O liability insurance, and led this session. Unlike general liability insurance — which any organization that has a physical plant would be foolish not to have — many nonprofits are uncertain whether they need D&O coverage. When a person becomes a board member of a nonprofit organization, she assumes a level of responsibility for the organization (“duty of care”), and exposes herself to claims for not running and managing it in a proper way. Whether or not your organization needs D&O insurance depends on what the likelihood is that one of your board members will b
