Directors & Officers Liability
The benchmark for management liability insurance
A nonprofit’s entire staff is essential to its success. The officers at nonprofits are often surprised to learn they are vulnerable to mismanagement lawsuits brought by third parties. These types of lawsuits are expensive to defend and can result in serious financial loss and damage to a nonprofit’s reputation.
The ASAE-Endorsed D&O policy provides maximum protection for your staff and business entity. It includes unique coverages, like Antitrust Allegation Protection, Standard Setting Coverage and Chapter Coverage that you won’t find anywhere else—and it is typically half the price of the competition!
- Mismanagement of assets
- Unfair employment practices
- Violation of bylaws
- Conflicts of interest
- Breach of contract
- Improper self-dealing
- Failure to file annual report
- Fraudulent conduct, reports, financial statements
- False or misleading reports
- Failure to detect embezzlement
Coverage depends on the actual facts of each case. Please refer to the policy to determine all terms, conditions, exclusions, and limitations of coverage.
Among the most expensive claims nonprofit associations face today are violations of the Sherman Act and the Clayton Act. The cost to defend a standard setting or price fixing lawsuit can run into the millions. To learn more about this important coverage read Antitrust and Employment Practices Liability Exposures.
If you offer certification or accreditation, should one of your members become the target of a negligence or incompetency suit and you’re drawn into the suit, Standard Setting protection provides you with a legal defense.
Depending on your association’s involvement in standard setting, the program addresses it in the following manner:
- If it is determined during the application process that an association is not engaged in a standard setting activity, we will issue the policy as silent on the matter.
- If during the application process it is determined that an association is heavily engaged in standard setting activities, an exclusion would be attached to the D&O policy, and the association should consider a separate Errors and Omissions Insurance policy.
In addition to providing D&O coverage to your association headquarters, D&O coverage can be provided to all of your association's chapters. Within our program, chapters have their own individual policies with comprehensive D&O protection at a competitive premium.
A high percentage of D&O claims filed against nonprofits are employment practices related. The ASAE-Endorsed D&O policy includes comprehensive employment practices liability that helps protect you against allegations of such employee-related lawsuits as:
- sexual harassment
- wrongful termination
- wrongful discipline
- failure to employ
- failure to promote
Reimburses expenses resulting from network security breaches. Includes up to $100,000 for notification and monitoring costs, as well as public relations firm to aid in image restoration.
Provides a defense cost sublimit for Wage and Hour claims. Insureds outside of California, with under 15 employees, are eligible for limits as high as $500,000.
Provides up to $250,000 for violence incidents by reimbursing business interruption expenses (lost income and extra expenses); employee expenses (lost wages, counseling and security); and public relations firm expenses to restore the nonprofit’s public image.
Provides up to $250,000 for public relation firm and legal fees related to Regulatory crisis, Management crisis, Sexual Abuse allegations, and Fundraising fraud.
Broadened wording to include Insureds once identified in a Wells Notice, subpoena or target letter as a target against whom a formal proceeding may be commenced.
Coverage is provided for officers, directors, board members, trustees, employees, volunteers and the nonprofit entity under one policy.
- Defense outside the limit of liability
- $250,000 Fiduciary Liability sublimit for defense and settlement costs for allegations of mismanagement of employee benefit plans
- Directors, officers, employees, volunteers, trustees and committee members are covered under the definition of Insured
- Coverage may also extend to cover an Association Management Company acting on your behalf
- Entity coverage for liability incurred by the organization
- Personal injury and publisher's liability helps protect against suits claiming damages for libel, slander, copyright or trademark infringements
- Automatic coverage for nonprofit subsidiaries
- Unlimited Extended Reporting Period (ERP) for past board members
Arch Insurance is market-leading insurer in the U.S. They are rated A+ (Superior) by A.M. Best Co., placing them among the top 10% of the most financially secure insurance companies in the U.S. They have enhanced the ASAE-Endorsed Directors & Officers Liability Insurance program by adding over a dozen new coverages to the policy and increasing the policy limits on a number of existing coverages—without driving up the cost.
ASAE Insurance Company is a captive insurance company managed by the ASAE Insurance Company Board of Directors & Officers. Founded in 2005, the ASAE Insurance Co. is exclusively dedicated to adding an extra layer of financial security to the ASAE-Endorsed Association Business Insurance Program.