2016 Directors and Officers Insurance
February 17, 2016
The Neighborhood and Community Relations Department is working to secure a new Directors and Officers Policy that will cover most neighborhood organizations. The current policy expires on March 1, 2016 and we are talking with several agents and carriers to find a policy with lower deductibles and broader coverage.
Directors and Officers liability policies help protect the board from legal suits brought against the nonprofit for employment practice problems, including but not limited to: wrongful firing, wrongful hiring and harassment on the job. These problems make up over 90 percent of the suits defended by Directors and Officers liability policies. Directors and Officers liability policies may also defend for suits against the board for wrongful handling of the organization’s revenues or other malfeasance.
Please note that the Directors and Officers Policy is different from the General Liability Policy that every neighborhood organization is required to carry.
Directors and Officers
Arranged and paid for by NCR, and covers most neighborhood organizations.
Each neighborhood organization arranges for and pays for their own General Liability Policy.
Not required, but highly recommended for any nonprofit organization that utilizes staff or volunteers.
The City requires that all vendors (including neighborhood organizations) carry of general liability protection.
Directors and Officers liability policies protect the board from legal suits brought against the nonprofit for “wrongful acts,” including but not limited to: wrongful firing, wrongful hiring and harassment on the job, or malfeasance. Typically, these problems make up over 90 percent of the suits defended by Directors and Officers liability policies.
Directors and Officers liability policies also defend suits against the board for wrongful handling of the nonprofit revenues. Examples of this may include making organizational investments to a defunct or inappropriate company, or an arts organization spending organization funds on housing programs rather than arts programs.
General Liability insurance is sometimes referred to as “slip and fall” coverage. GL policies help provide protection against injuries or physical damage that may occur at an organizations events or property. It typically protects organizations against bodily or personal injury and property damage. Some policies may also include coverage for advertising injury (libel, slander or copyright infringement).
If your neighborhood organization is participating in an event, rents office space or leases property for a community garden, other parties may request a “certificate of insurance” as documentation that you have insurance coverage that includes that activity.
Neighborhood organizations should talk to their insurance agent when planning an event, or when participating in someone else’s event to see what is covered. For example a lot of neighborhood organizations rent “bouncy houses” for events for children to play in, but those kinds of activities, like trampolines, typically are excluded.
See http://www.nonprofitrisk.org/library/enews/2007/enews060607.htm for more information.
Last updated Feb 17, 2016