Why Directors and Officers Insurance for Your Volunteers is so Important

Category: Personal Insurance

Your volunteers are willing to give a lot to run your organization. However, no matter how generous your volunteers may be, you can’t expect them to risk their entire net worth for your group. If you don’t have Directors and Officers insurance for your volunteers, this is exactly what you are doing.

Why Do You Need Directors and Officers Insurance?

Lawsuits are a common part of American life. If you’re organization works out of a physical location, you probably set up a general liability policy for just this reason. This coverage protects your group in case someone gets hurt in your building or a volunteer causes property damage. If someone sues your organization because of one of these issues, the general liability coverage will help cover the legal damages.

However, general liability coverage only covers physical damages. This means your volunteers would be on their own if they were sued for the way they ran the organization.

What Does Directors and Officers Insurance Cover?

Your volunteers are liable for the decisions they make for your organization. If one of them mismanages an investment account and you can’t pay a creditor, the creditor could sue both you and the volunteer. If a volunteer needs to fire an employee, the employee could file a wrongful termination suit against the volunteer.

With directors and officers insurance, you give your volunteers legal support. In the event of one of these lawsuits, this insurance would help for pay a volunteer’s legal counsel and for any financial settlement for the case.

Exclusions

Directors and officers insurance won’t cover everything though. If someone sues a volunteer because the volunteer broke the law, this would be excluded. Directors and officers insurance also won’t cover a lawsuit initiated by one volunteer against another one. Lastly, some policies exclude work-related lawsuits like a wrongful termination suit. If your volunteers will be managing employees, make sure your policy covers work-related issues.

Don’t put your volunteers’ financial lives at risk. With directors and officers insurance in place, people will be much more willing to volunteer for your group. Were you aware that your general liability coverage didn’t cover performance related lawsuits? Has your organization ever had to deal with a serious lawsuit?

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