D & O Risks, Exposures and Insurance Options

Whether for a non-profit club or for-profit organization, those who serve on the Board of Directors share similar duties and responsibilities.  Likewise, board members and officers may be held personally liable for their actions (or inactions).

In their duties, the board must provide care in making decisions, exercising diligence and prudent judgment.  They must understand the group’s rules and bylaws, and follow procedures and guidelines as they develop public policies. And the individuals who comprise the board must put the good of the organization above their own personal interests.  This includes discretion and confidentiality about board matters.

Claims against nonprofit groups may arise from a breach in any of the above as perceived by either third parties or vendors.  Directors’ and Officers’ liability coverage is available to protect the organization, board members and officers (and their spouses), as well as other individuals in the organization serving as either employees or volunteers.

From Insurance Journal—West Region, Sept. 25, 2006 issue, pp. 74-78.