While a nonprofit does its best to perform a service for humanity, trouble can often befall the volunteers, the directors, and the board by way of liability lawsuits. As a result, many organizations carry insurance policies that can them financially in the event of a nonprofit lawsuit. Many times, board members will be specifically named in suits, with the following being some of the more common claims.
- A board member is accused of inuring someone on purpose.
- A board member neglects to confirm that payroll, taxes, and other important paperwork is filed and process according to regulations.
- A board member makes a guarantee for business debt or a loan for the organization and defaults on the commitment costing a loss of assets or other consequences.
- A board member is accused of fraudulent or illicit activities that create harm or loss to the organization or its members.
For the best protection against the devastating financial chaos that accompanies a claim of negligence or wrongdoing, the professionals at David Sayles Insurance recommend insurance coverage that addresses general liability as well as errors and omissions. Nonprofit policies are tailored to the unique exposures of the industry, so talk to your broker about the details of your coverage plan and ensure you are protected if a claim arises.