Nonprofits Insurance Alliance

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Home / Coverages / NONPROFITS OWN® / Directors and Officers Liability

Directors and Officers Liability

The key distinction with directors and officers liability is that it is intended to cover wrongful acts that are “intentional,” as opposed to “negligent” events or acts covered under General Liability. These actions may be in error and wrong, but they are, nonetheless, “intentional” acts. A good Directors and Officers policy should include broad coverage for all types of employment related actions, including wrongful termination, harassment, discrimination, failure to hire, etc. It should also pay defense costs as they are incurred, not on a reimbursement basis.

General Liability is the core coverage that all of our member insureds carry with us. We do not write stand-alone Directors and Officers.

Enhanced Coverage of NONPROFITS OWN® Directors and Officers Coverage

Summaries of key features only. Actual policy language will differ.

  • Deductible options available including $0
  • Policy limit $1 million: aggregate limits to $2 million
  • Umbrella limits up to $10 million available
  • Flat rate D&O available for nonprofits with no employees
  • Defense costs outside the policy limits

Read more…

Flat Rate D&O

Our flat rate D&O product is for 501(c)(3) nonprofit organizations with no employees. Specifically designed for nonprofits with no employees, this low-cost product provides D&O protection for nonprofit board members and the organization, but excludes coverage for any employment-related actions. The flat rate is $600 for limits of $1,000,000. New and renewal members with no employees are eligible. General Liability is the core coverage that all of our member insureds carry with us. We do not write stand-alone Directors and Officers.

From the Claim’s Files

Failure to Accommodate:
An employee with ongoing performance problems was eventually terminated, but alleged he was not given an accommodation due to stress in his personal life. Unfortunately, the employee’s personnel file was not well documented on the performance issues, and the nonprofit had not addressed the accommodation request. The employee was highly paid, and the matter was heavily litigated over a four-year period. Because of the potential for an unfavorable jury verdict and the significant exposure to statutory plaintiff attorney fees, the claim was eventually mediated to a settlement of $350,000 after $230,000 in defense legal expenses were incurred.

Retaliation:
Four employees claimed they had been wrongfully terminated for complaining about unpaid wages. Legal discovery revealed that the unpaid wage claims had some merit and the terminations based on performance problems would be difficult to establish. While the four claims were eventually settled for $40,000, it took more than $35,000 in defense legal costs to move the litigation to the point where it could be resolved. Retaliation claims are currently the most significant employee practice liability exposure to employers, for both nonprofit and for-profit organizations.

Breach of Contract:
A nonprofit was sued by a builder for breach of a construction project contract, claiming unpaid contract damages. Often, breach of contract claims are not covered in D&O policies, but our forms contain a $250,000 defense cost only enhancement, so we were able to provide the nonprofit with an experienced defense attorney to provide that defense. While it took almost $25,000 in defense fees and costs to get the case into settlement posture, the nonprofit was able to obtain a very favorable compromise on the contract damage issues.

Learn More

  • Flip through our 2019 Annual Report
  • Our Enduring Commitment to the Nonprofit Sector
  • Top 10 Reasons 501(c)(3) Nonprofits Rely on NIA
  • Help Us Win our Fight for Nonprofits in Congress with the Nonprofit Property Protection Act
View Our FAQ

Thanks for providing an alternative insurance source and for taking the time to understand your nonprofit clients.

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  • List of Coverages
  • NONPROFITS OWN®
    • General Liability
    • Directors and Officers Liability
      • Directors and Officers Details
    • Flat Rate D&O
    • Improper Sexual Conduct and Physical Abuse Liability
    • Social Service Professional Liability
    • Employee Benefits Liability
    • Business Auto Liability
    • Non-Owned/Hired Auto Liability
    • Umbrella Liability
    • Auto Physical Damage (NIAC)
    • Businessowners Property (NIAC)
    • Employee/Volunteer Dishonesty (NIAC)
  • Companion Programs

Learn More

  • See States Covered
  • Watch Video
  • FAQs

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  • About
    • Nonprofits Insurance Alliance®
    • Mission & History
    • Financials
    • Employment
    • Boards of Directors
    • Senior Leadership
    • In the News
    • Videos
    • States Covered
    • Our Members
    • What Our Members Are Saying
    • FAQs
  • Coverages
    • List of Coverages
    • NONPROFITS OWN®
      • General Liability
      • Directors and Officers Liability
      • Flat Rate D&O
      • Non-Owned/Hired Auto Liability
      • Umbrella Liability
      • Businessowners Property (NIAC)
      • Improper Sexual Conduct and Physical Abuse Liability
      • Social Service Professional Liability
      • Employee Benefits Liability
      • Business Auto Liability
    • Companion Programs
      • Auto Physical Damage (ANI)
      • Businessowners Property (ANI)
      • Employee Dishonesty (ANI)
      • Participant/Volunteer Accident
  • Insurance Brokers
    • Learn More about Working with Us
    • Request a Direct Appointment
    • States Covered
    • New Business Applications
    • Broker FAQ
  • Events
    • Webinars
    • Conferences
  • Contact
    • Report a Claim
    • Addresses, Phone & Map
    • Business Continuity Plan
    • Disclaimers
  • Benefits of Membership
    • Publications
    • Services
    • Tools
    • Training and Education
    • NIAC Member Loan Fund
    • Dividend Plan
    • Stable Pricing
  • Blog
  • Webinars
  • Get a Quote

  

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AM Best A VIII (Excellent) Rating

The insurance policy, not this website, forms the contract between the insured and the insurer. The policy may contain limits, exclusions, and limitations that are not disclosed in this website. Coverages may differ by state. NIAC, ANI, and NANI are AM Best A VIII (Excellent) insurers with 501(c)(3) nonprofit status. Nonprofits Insurance Alliance® is a brand of Alliance Member Services® (AMS).
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Nonprofits Insurance Alliance® (NIA) is a brand of Alliance Member Services® (AMS). © 1996–2021 AMS.