Directors & Officers Insurance (commonly referred to as D&O insurance), is often overlooked by nonprofits for the simple reason they are uncertain whether or not they really need D&O coverage. Read this article noting compelling reasons to protect your organization. This should reassure you that D&O insurance has significant value to even the smallest nonprofit organization.

When a person becomes a board member, she assumes a level of responsibility for the organization and thus exposes herself to claims for not managing the organization properly. Even if the case brought against a board is thrown out, the organization still bears the brunt of having to pay the legal fees. Legal expenses could be brutal for a small organization and could even put them right out of business.
In general, D&O insurance includes coverage of an officer or director in the discharge of his/her duties. This includes but is not limited to:

• Any actual or alleged act
• Misstatement or misleading statement,
• Neglect or breach of duty
• Omission and/or error

As with all insurance policies, read the policy carefully to ensure it includes all the necessary components for your organization. Here is a checklist of issues to review when looking to purchase D&O insurance.

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