By: Shannon Robinson, CPA- Senior Accountant

Have you ever wanted to serve on a non-profit board but you did not for fear that you would make a mistake? Organizations often purchase Directors and Officers (D&O) Insurance to assist them in attracting competent professionals to serve on their boards without fear of personal financial loss. Even though the insurance is for the sole benefit of the directors and officers, the organization usually pays for it.     

Directors and Officers Insurance generally provides coverage for any actual or alleged act or omission, error, misstatement, neglect, or breach of duty.  D&O Insurance provides reimbursement for losses in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers.  Note that intentional legal acts or fraud are typically not covered under directors and officers policies.

D&O Insurance Policies can be structured to meet the interest of each organization based on their risk appetite and coverage needs. Polices usually cost less than most organizations think they do. Premiums can range from as low as $1,000 or less for a small non-profit organization to $15,000 for a small public company, and up to $100,000 or more for a large company.

If you are thinking about serving on a board ask the organization if they have directors and officers coverage as this may set your mind at ease and make your decision easier.  Please contact us with any questions you may have.