Are you one of the millions of Americans who donate your time to serve as a volunteer board member for a non-profit organization, club, PTA, or church? If the answer is “yes”, now is the time to confirm that the business or non-profit organization you are volunteering with has Directors and Officers (D&O) insurance.
Directors and officers liability insurance provides coverage for claims made against you while serving on a board of directors and/or as an officer. Think about the decisions you make as a board member. Decisions that can have a dramatic impact on an organization. What happens if the decision is wrong?
“The last thing volunteers want to consider is what would happen if a lawsuit is filed against them as a result of their efforts. But unfortunately, it happens,” says Ross Turner, president of The Turner Agency.
A common misconception is that your homeowner’s policy provides coverage if you are sued. While your homeowners’ policies is designed to cover bodily injury claims (someone slips on cracked pavement in your driveway) and/or property damage, the coverage was not created to cover a lawsuit stemming from your actions as a board member.
In addition, homeowners policies are not designed to cover “professional services.” For example, if you are a financial analyst or accountant, you may be asked to serve as the treasurer or finance chairman of your church or favorite non-profit organization. Even though you are not paid for your services, the “professional services” exclusion under your homeowner’s policy still applies, which means there is no coverage.
Finally, homeowners’ policies won’t cover claims of personal injury unless this coverage is specifically added. Personal injury insurance can added as an endorsement to your homeowner’s policy to cover claims such as libel, slander, wrongful eviction, and false advertising.
Your best bet is to be sure the board you are serving on carries Directors and Officers Liability Insurance. Directors and Officers insurance is relatively inexpensive. The absence of this insurance leaves you at risk of having no personal insurance to defend a suit brought against you by the organization and should influence your decision to serve. If they don’t carry this coverage, give us a call. We are happy to help!
