Enscoe Long Insurance Group specializes in providing customized insurance for nonprofits. In fact, we provide insurance to over 200 nonprofit agencies. There are a variety of insurance products, which nonprofits should carry.
This week we are focusing on specialized insurance products.
Directors and Officers Liability Insurance (D&O)
D&O insurance policies are common and necessary to cover the actions and decisions of the board directors and officers in your nonprofit. Regardless of your organization’s size and board experience, Enscoe Long usually recommends that all nonprofit organizations purchase D&O insurance protection. Why?
Nonprofit board members and officers should be protected if they’re named in a lawsuit alleging fraud or financial mismanagement. Creditors may pursue a board member, if their investment decisions cause their nonprofit to fail to meet its financial obligations.
D&O insurance can protect directors and officers against the legal costs of a lawsuit and any damages, if the court rules in the plaintiff’s favor.
Policies may exclude coverage for criminal or fraudulent behavior, claims between directors or other situations. Since D&O insurance only applies to officers and the board of directors, your nonprofit still needs general liability insurance to address other risks.
D&O liability insurance will not provide coverage for what many would consider the worst acts of the directors or officers, including but not limited to dishonesty, fraud, criminal or malicious acts committed deliberately. D&O insurance will not provide coverage for bodily or personal injury of a person or physical damage to a third person’s property.
Sexual Misconduct Liability
Nonprofit improper sexual conduct and abuse coverage provides protection for actual and alleged claims of various types of abuse, by your employees and volunteers to third parties.
Sexual misconduct liability pays for defense and settlement, if the plaintiff wins their case in court. Claims may include client lawsuits against an employee, volunteer, or contractor due to abuse or from negligent supervision resulting in abuse or molestation.
General and professional liability policies exclude these risks, so organizations that serve at-risk populations such as seniors, youth, or the disabled should consider this coverage.
For non-profit organizations that are able and willing to take steps to control and minimize their abuse / molestation exposure, insurance coverage is available through Enscoe Long Insurance Group. Nonprofits can also take basic anticipatory measures such as background/drug checks, diversity training, how to respect others in the workplace training and enforcing rules that prevent one-on-one isolated contact with vulnerable persons.
Cyber Liability Insurance
Nonprofits are just as vulnerable to data breaches as any other for-profit company. Nonprofits often retain and manage very sensitive data. Confidential client, donor, and employee data are all at risk, especially if your organization uses mobile technologies, such as laptops and cellphones.
Does your nonprofit:
- Conduct e-commerce on its website, such as processing donations or event registrations?
- Store and transfer (such as by sending to the cloud) “personally identifiable information,” about anyone, including donors? (Common examples of personally identifiable information include: clients’ medical information; employee records, including drivers’ licenses, addresses, and social security numbers.)
- Collect information on donors, patrons, newsletter subscribers?
If your nonprofit engages in any of the above, you may want to take steps to address cybersecurity threats.
Cyber liability insurance covers expenses associated with data breaches, such as costs to defend claims by state regulators, fines and penalties, credit monitoring, and identity theft losses. Your Enscoe Long insurance agent can walk you through your options.
Interested in learning more? Check out our previous blog posts on liability and property insurance for nonprofits.
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