3 Things DO Insurance Won’t Cover


Insurance for your non-profit can reduce your liability and protect your assets. D&O insurance for nonprofits protects the directors and board members against claims that could arise as they go about their duties for the nonprofit. Insurance offers peace of mind until it doesn’t cover what you think.

Corporate Infighting

D&O insurance usually covers legal fees when lawsuits arise, but if the lawsuit is between two board members or officers, the D&O insurance will let the people fight it out on their own. Whistleblower suits are exempted, as are claims brought by bankruptcy trustees.

Prior Claim Knowledge

When you purchase a D&O policy, you should be asked if you are aware of any potential issues that could be a reason for a claim in the future. You may be asked to provide more details if the answer is yes. The insurer will then determine how to proceed. If you answer no, and are later determined that you were aware, the D&O insurance may deny your claim.

Criminal or Fraudulent Actions

D&O insurance for nonprofits typically includes a provision for criminal or fraudulent activity. If an officer receives money they weren’t entitled to, the D&O insurance would not cover their legal fees.

It’s important to know what is and isn’t covered with business insurance.