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Best Answer
Srinivasan Mahadevan answered 3 years ago
Although Directors’ and Officers’ liability insurance (D&O) often is associated with large for-profit companies, they are not the only ones that need it. Many people hold the common misperception that directors (including trustees) and officers of a nonprofit organisation do not have a meaningful exposure to personal liability. The reality of today’s tenuous legal environment is quite the opposite.
Regardless of organisational structure, directors and officers of all nonprofit organizations share certain common responsibilities which, if not properly discharged, may give rise to personal liability.
Function of nonprofit directors:
The primary role of nonprofit directors and officers is to maintain financial stability and provide the necessary resources and environment to accomplish the goals and purposes of the organization. The unique nature of nonprofit organizations presents directors and officers with difficult challenges in performing this role.
In today’s litigious society, nonprofit organizations and their board members commonly face lawsuits for an extended list of alleged wrongdoings: Discrimination (age, race, sex, employment, membership), Harassment, Wrongful termination of employees, Inefficient administration or supervision, Waste of assets, Misleading reports or other misrepresentations, Libel and slander, Failure to deliver services, Acts beyond the granted authority.
The cost of this insurance depends on the limit of liability being purchased, scale of business operations, strength of the balance sheet of the company etc. In general the cost will vary between INR 55,000/- to INR 75,000/- for a limit of liability of INR 7.5 crore.
Regardless of organisational structure, directors and officers of all nonprofit organizations share certain common responsibilities which, if not properly discharged, may give rise to personal liability.
Function of nonprofit directors:
The primary role of nonprofit directors and officers is to maintain financial stability and provide the necessary resources and environment to accomplish the goals and purposes of the organization. The unique nature of nonprofit organizations presents directors and officers with difficult challenges in performing this role.
In today’s litigious society, nonprofit organizations and their board members commonly face lawsuits for an extended list of alleged wrongdoings: Discrimination (age, race, sex, employment, membership), Harassment, Wrongful termination of employees, Inefficient administration or supervision, Waste of assets, Misleading reports or other misrepresentations, Libel and slander, Failure to deliver services, Acts beyond the granted authority.
The cost of this insurance depends on the limit of liability being purchased, scale of business operations, strength of the balance sheet of the company etc. In general the cost will vary between INR 55,000/- to INR 75,000/- for a limit of liability of INR 7.5 crore.
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