III.   Liability

Checklist for Comparing Features of Nonprofit Directors and Officers Liability Policies

Need a D&O Insurance quote?  Example of premium costs.

Nonprofit Organization Liability Insurance (Notice-This is a claims made policy)

Resource List:

Federal Trade Commission

U.S. General Services Administration

National Underwriter Property & Casualty-Risk & Benefits Management, Feb 27, 1995 n9 p12(2) 
D&O coverage essential for charitable groups. (directors and officers liability insurance) John O'Toole. 
Abstract: Charities and other non-profit corporations need directors and officers liability (D&O) insurance coverage to protect their directors from D&O lawsuits. Directors of charities and non-profit corporations have fiduciary and operational responsibilities that open them up to the risks of D&O litigation from employees or constituents of the charity or non-profit corporation. D&O insurance coverage will protect the assets of both the charity or non-profit corporation and the assets of its directors. 

Association Management, August 1996 v48 n8 p143(4) 
Controlling the risks of lawsuits. (includes related article on CNA Insurance's services) Mary McMillan. 
Abstract: Nonprofit associations should seriously consider the likelihood of their becoming embroiled in lawsuits that could not only prove to be expensive but damaging as well to their organizational image. Thus, management should be fully aware of employment laws and their nuances and should seek coverage from pertinent insurance companies to take care of circumstances that lead to lawsuits and which are beyond their control. 

The following overview contains a RELATED ARTICLE: Checklist for Comparing Features of Nonprofit Directors and Officers Liability Policies
Association Management, Jan 1995 v47 n1 pL53(3) 
A quick overview of what you need to know about your directors and officers policy. John E. Black Jr.. 
Abstract: Trade association board leaders should have a firm grasp of liability insurance concepts to buy the appropriate policy and determine insurer responses in the advent of a lawsuit. The liability insurance policies of directors and officers cover various risks inherent to the position's status and conduct. Several insurers cover claims against organizations and all their personnel via policies or endorsements. Certain principles that should be remembered were presented.

Association Management, Jan 1999 v51 i1 p108(2) 
Ensuring volunteer protection: steps for limiting liability for volunteer leaders. (Board Primer) Jed R. Mandel. 

The National Public Accountant, March-April 1998 v43 n2 p8(2) 
Volunteer act offers limited protection: directors & officers liability insurance still a necessity. 
Abstract: The provisions of the Volunteer Protection Act including the ramifications the legislation will have on insurance should be thoroughly scrutinized. While the law will encourage 'volunteerism,' it should not be taken as a discouraging sign from associations who wish to protect their volunteer members, employees, directors and officers. The act, for example, does not affect lawsuits brought against associations themselves and association employees. 

Colorado Business Magazine, Dec 1997 v24 n12 p44(2) 
Is your board bullet-proof? (need for liability insurance) Jack Sommars. 
Abstract: Exposure to potential legal liabilities is no stranger to positions of leadership.  This is why organizations purchase insurance policies such as the directors' and officers' liability insurance (D&O). Even non-profit entities are urged to consider buying said policies to cover legal costs. The major causes of D&O liability claims nationwide are inadequate/ inaccurate disclosure/financial reporting, wrongful employee termination/discrimination, breach of fiduciary duty, dishonesty/fraud, takeover bids/ threats, breach of employee contract and cost/quality of product/service. 

Business Insurance, Sep 8, 1997 v31 n36 p20(1) 
With caution, terminations won't backfire. (insurance industry) John W. Mahoney. 
Abstract: Hasty and unsubstantiated firing of employees is one of the most common causes of lawsuits seeking liability insurance claims. It is thus important for directors and officers to employ ethical procedures and careful decision-making procedures when firing an employee to avoid the risk of a lawsuit which is accompanied by high costs and wasted time. Furthermore, company officials must understand the discrimination law, give clear warnings to concerned employees, and uphold consistent policies to protect the firm from time-consuming, costly and damaging lawsuits. 

National Underwriter Property & Casualty-Risk & Benefits Management, July 7, 1997 v101 n27 p4(2) 
Non-profit D&O claims on rise. (directors and officers liability insurance) Susan Daniels. 
Abstract: Nonprofit organizations have had claims against their directors' and officers' liability insurance reach 36% of the 726 respondents to a 1997 survey, in comparison to 17% in a 1993 survey. Health care organizations are responsible for 45% of the claims.  Approximately 80% of the claims concern employment practices, especially wrongful firing and discrimination. 

National Underwriter Property & Casualty-Risk & Benefits Management, May 19, 1997 v101 n20 p81(2) 
Nonprofit volunteers should be insured. Stephanie D. Esters. 
Abstract: Volunteers, should they be named in a lawsuit, could be held personally liable if they are not covered by a directors and officers (D&O) liability insurance policy.  Coregis' Heather Smith warned that volunteers' personal assets, including their home, could be at stake. She added that many small nonprofit organizations do not carry D&O coverage. Coregis' John Mahoney warned volunteers against relying on state immunity laws covering volunteers. 

LI Business News, Jan 6, 1997 n1 p27(1)
Disagreement or defamation? (differences within civic and professional organizations) Peter McNamara. 
Abstract: Civic groups and professional associations must seriously consider buying directors' and officers' insurance for protection against litigation. Although many differences within organizations can be resolved by the members themselves, some can lead to defamation suits that are difficult to resolve and expensive to defend. Directors' and officers' insurance covers significant legal fees and other costs that are incurred in defending the charges.