If you have ever been asked to serve on a board for a Non-Profit Organization, you may not have given it a lot of thought regarding any actions or decisions you or other board members may make along the way. After all, this may be a part-time position and you have the greatest intentions of establishing goals and making decisions on behalf of the organization. However, what about when the decision you or someone else makes that later causes controversy or creates alleged wrongdoings during the scope of business? Before agreeing to serve on a board, find out how Directors and Officers insurance can impact your Non-Profit.
Directors and Officers (D&O) Insurance
In a non-profit setting, there may be directors and officers that are not as familiar with business dealings as their counterparts working for a For-Profit company. Those working in the non-profit situation may or may not even be full-time, lack the experience on business dealings, or may have insufficient time to make executive decisions in comparison to someone who works full-time in a For-Profit business. As a result, mistakes can and will be made. This is where Directors & Officers insurance comes into play.
This type of insurance is designed to protect and reimburse directors, officers, and trustees from allegations citing wrongful doing or negligence during the scope of business. Typically, in Non-Profit Organizations, this type of insurance is not only recommended, but for many, it is required. While those serving on a board of directors may have only the best intentions, they may lack the skill set needed when making appropriate business decisions.
Some Distinctive Situations That Could Result in Legal Action, but Not Limited to:
- Unfair Employment Practices
- Failure to Comply with Regulations and Law
- Reporting Inaccuracies or False Information
- Shareholder Actions/Decisions
- Human Resource Issues
- Misrepresentations of Company
Ideal Insurance Agency understands all of your business insurance needs. We can assess your risk potential and from there custom build a package policy that takes into consideration your unique business needs, inclusive of D&O within a budget that is affordable to you. Call us TODAY at 941-921-2102 and remember, before you say “yes” to serving on a board of directors for a Non-Profit, find out whether it is protected with D&O insurance.