If you serve on the Board of a Nonprofit organization, ask the organization how it will protect you if you are named in a Liability suit. Directors & Officers Insurance protects Board members individually if sued for mismanagement of the organization. Many smaller nonprofits have tight budgets and choose to go without this protection.
Directors & Officers Insurance sounds expensive, and it sometimes can be. However, if you're a small organization, you may be surprised at how affordable the coverage can be. Ask an agent about it.
One of my brokers, Victor O. Schinnerer & Company, Inc., developed a great article on the dangers of going without D&O coverage. This is required reading.
8 Compelling Reasons to Insure Your Non-Profit Organization
Here are some snippets:
Reason #2: Insurance protects your organization’s assets, as well as the personal assets of people that sit on the board. Remember, even frivolous claims cost you time and money to defend yourself.
Reason #4: Staying continuously insured could reduce your costs. Firms that renew their coverage may be eligible to receive longevity credits just for staying continuously insured in our program.
Reason #5: Buying and keeping Directors & Officers coverage is a much better option than relying on the Volunteer Protection Act for help. The Act/Law does not prevent a volunteer from being sued. In addition, compensated individuals (the most obvious being compensated employees and directors or officers) are not provided protection under the law.