Directors & Officers (D&O) Insurance

Why is it important?

 

We are often asked what is D&O insurance and why it is important for our organization to purchase such insurance.  The quick answer is that in many states you as a volunteer of an organization can be held personally accountable for your actions. As well as the actions of your organization (non-profit entity).  A D&O policy will provide for the legal expenses and settlement payments when an entity or member is accused of or found guilty of “wrongful acts”.

 

These “wrongful acts” include actual or alleged Act, error, omission, misstatement, misleading statement neglect, breach of duty, Personal & Advertising Injury.   Some real life claims scenarios include: Breach of Bylaws, Misappropriation of Funds, Anti-Trust allegations, and Membership Discrimination.

 

What it is not?

 

In contract D&O insurance is not General Liability insurance.  Every entity has an exposure to actual or alleged “Bodily Injury or Property Damage” claims.  As a volunteer organization, things aren’t always done in a through manner, often leading to injury of persons and property.    A General Liability policy will provide for the legal expenses and settlement payments when an entity or member is accused of negligence that causes bodily injury or property damage to others.

 

Some real life claims scenarios include:

  • injury to vendor caused by a entities trade booth falling over striking someone in the head
  • hotel employee who tripped over the electrical cords running laptop and projector
  • the member who was injured during a vendor demonstration during a floor show

In some claims only legal fees were paid, in other claims settlements were reached.

 

In summary there are a minimum of two distinct policies an organization should secure to protect their volunteers and the entity itself.  A Directors & Officers policy and a Business Owners Liability policy. Other protection to consider include Cyber Liability, Crime Bond and Fiduciary Liability depending on the size and assets of your organization.

 

For more information please call, Walterry Insurance Brokers at 800-638-8791 or email commercial@walterry.com.