The question I hear most from Non Profits is "can you help us with our directors & officers coverage?"
The short answer is yes, we have many markets with programs designed specifically to meet the unique needs of non-profits, and Directors and Officers Liability Insurance is one of the solutions we readily offer.
Here's a slightly longer answer and a glimpse in to why you need a risk advisor and not just an insurance broker to sell you a policy. Directors and Officers Insurance protects individual directors and officers and will defend them from claims for personal liability (unintentionally failing to disclose conflicts of interest; breach of duty, care, or loyalty; or commingling personal and business monies and assets). It may also provide coverage when the corporation agrees to indemnify the board for amounts paid to defend or settle claims against the directors and officers.
Risk Advice: When a Board wants to protect the Individual Board Members, it is normally required that the corporate bylaws be modified to add a 'trigger' whereby the Corporation itself agrees to indemnify the Board Members for costs related to suits against them related to their service to the Corporation. Without a 'trigger' you may be wasting your money on a D&O policy.
A good Attorney can provide the proper language for this trigger or here's a sample pulled from the internet (no legal advice is being given).
"The organization agrees to indemnify, defend and save harmless the board members, its officers, directors and employees, from and against all liability, loss, cost or expense (including attorney's fees) by reason of liability imposed upon the Client, arising out of or related to organization's activities, whether caused by or contributed to by the members or any other party indemnified herein, unless caused by the sole negligence of the member or any other party indemnified herein."
Along with finding the right Directors & Officers Liability Insurance for your needs, a necessary next step is to assess whether revisions to your bylaws are necessary.
A significant portion of claims filed against boards and individual members are frivolous and are ultimately dismissed. Even when a case is thrown out, legal defense costs are usually incurred and can be significant. Coverage for legal defense costs is one of the most important components of a Directors & Officers Liability Insurance policy.