What is Directors and Officers (D&) insurance, and do we need it?
Pamela: With the predominance of wrongful termination lawsuits, if the organization has even one employee, D&O insurance with employment practices coverage is probably essential. Typically, lawsuits are filed when someone is hurt by some sort of accident and that person believes that someone, or some organization, is responsible for that accident. For example, a person tripped because the stairs were not properly lit or a person was injured in a car accident because someone else ran a red light. In contrast, a different type of claim is one made not because of the accident itself, but because someone believes that the board took an intentional and improper action. The most common lawsuit of this type would be one alleging that the board of directors allowed an improper termination of an employee. Insurance for these types of claims against nonprofits is typically found in the D&O policy. In terms of D&O insurance, almost 95 percent of claims against D&O policies are employment-related,
