If you have ever served as a director or an officer at a Non-Profit Organization, you realize the demands of serving the needs of the members. Certain responsibilities of the executives may result in personal liability while trying to establish goals for the growth of the organization along with the launching of funds/fundraisers. Many people may consider the insurance for Non-Profit Organizations as unnecessary, but before you agree to serve on a board of directors for a Non-Profit, find out whether your Non-Profit has Directors and Officers insurance.
What is Directors and Officers (D&O) Insurance
In a non-profit environment, you may have directors and officers that are not as familiar with business dealings as the executives operating in a For-Profit company. Perhaps in the non-profit situation, it may not even be a full-time position so he/she may face challenges that otherwise may not present a problem. Because of this, the business dealings may be more flawed posing a higher threat of allegations against the company, directors, officers, and trustees…hence the need for Directors and Officers insurance.
Companies invest in D&O insurance because simply, executives, directors, officers, and trustees can and do make mistakes. This insurance is designed to reimburse directors and officers for claims/allegations arising from lawsuits citing negligence or wrongful doings. This insurance is especially essential for Non-Profit Organizations for protection against mistakes made due to possible lack of experience or time to effectively and appropriately make business decisions.
Below Are Some Typical Risk Scenarios That Could Result in Legal Action for Directors and Officers, but Not Limited to:
- Reporting Inaccuracies
- Shareholder Decisions/Actions
- Failure to Comply with Regulations and Law
- Human Resource Issues
- Misrepresentations of Company Funds
- Unfair Employment Practices
- And More
Alabama Business Solutions for All of Your Business Needs
Burkett & Associates Insurance Agency understands your insurance needs for your small Alabama business and can establish a package policy that affords multiple business solutions (including D&O) for all of your business needs within a budget you can afford. Call our offices today at 256-704-7400 so that you can have the right business protection in place, including D&O insurance.