Should Your Nonprofit’s Directors and Officers Be Insured? Here’s How to Tell

Directors and Officers Insurance Nonprofit

As the director or owner of a nonprofit organization, you automatically assume a degree of responsibility over the entity and put yourself at risk if someone feels you aren’t managing it appropriately. Called “standard of care,” this level of responsibility is what you must uphold, and if you fail to do so, you can be sued or held liable for damages. Most experts agree that these organizations should have directors and officers insurance nonprofit, and here’s why.

Directors and Officers Liability Insurance is Not Covered by General Liability Insurance

Most nonprofits carry general liability insurance, but directors and officers insurance is a separate entity. Professional liability insurance (sometimes called errors and omissions coverage) covers your organization in regards to the products or services it provides. The performance and actions of those on the nonprofit board are not covered.

Lawsuits Against Nonprofit Boards and Directors Are Skyrocketing

When you assume the role of director of a nonprofit, your personal assets are on the line. In some states, nonprofit directors are privy to immunities, limited liability and protection, but this isn’t the case in all states, and these statutes often come with limitations and also don’t apply to federal cases.

If you want to feel confident that you and your nonprofit organization stay protected under a broad range of circumstances, directors and officers insurance nonprofit is your best bet.



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