Limiting costs and unnecessary expenses is a top concern for non-profit companies. It’s not surprising that many of these organizations may choose to forgo insurance coverage such as Directors and Officers. Unfortunately, these organizations are missing out on many benefits that insurance for directors and officers for non profit companies offers, starting with the following two.
- Financial Protection Against All Claims
Many people believe Directors and Officers insurance primarily addresses the cost of settlements awarded if directors or officers are found negligent. However, this insurance also covers the expenses of defending directors and officers against claims. These defense costs can quickly become expensive, and there is little that non-profits can do to guard against the cost of frivolous claims. Purchasing appropriate insurance coverage can help a non-profit weather both fraudulent and legitimate claims.
- Freedom to Make Necessary Decisions
The risk of lawsuits can slow the decision-making process or even deter directors and officers for non profit companies from making decisions that could ultimately benefit the company. The threat of claims can even make it difficult for companies to fill director and officer positions. Proper insurance coverage allows directors and officers to focus on doing their jobs and what is best for the non-profit, rather than worrying about the way their actions will be judged later.
Coverage That Pays Off
Non-profits that lack Directors and Officers insurance can benefit from reconsidering their coverage. This insurance can be a valuable investment for non-profit organizations. The initial expense should more than pay off, for the organization as a whole and for its leading members, in the event of just one claim.