Directors and Officers Policies

Directors and Officers of Non-profits make decisions on daily basis that can have tremendous consequences and effects on the people around them. Most Directors and Officers try to be circumspect in their dealings. However, it is worthy of note that even the best managers make mistakes.

So, what happens if as a director or officer, you make a decision or take an action on behalf of your company that is seen as a “wrongful act” – even if you were acting in good faith?

This could result in a claim made against you for which you may be financially liable. Such claims are deemed insurable and can be covered with a Directors and Officers Liability Insurance policy

Directors’ and Officers’ liability covers Directors and Officers of companies financially for any claims made against them in the line of duty. The policy pays for any costs related to the claim, such as court proceedings or financial losses that result from the event.

What is Directors and Officers (D&O) Liability Insurance?

The Directors and Officers Liability Insurance (often called D&O) is Liability Insurance Policy payable to the Directors and Officers of an organization, or to the organization(s) itself, as indemnification (reimbursement) for losses or advancement of defense costs in the event an insured suffers a loss as a result of a legal action brought for alleged wrongful acts in their capacity as Directors and Officers.

The D & O policy is protection for the Directors and other key officers of organizations who occupy critical roles or decision-making positions with their personal assets exposed to any form of liability by virtue of omission in the course of carrying out their duties as required for their roles / responsibilities.

The purpose of a D&O policy is to provide financial protection against consequences of actual or alleged “wrongful acts” when acting in the capacity as directors and officers of the Company. It will pay for defense costs and financial losses resulting from any claim made against the insured but only when and to the extent that the company has indemnified the insured for the loss. In addition to this cover are certain extensions.


Past, present and future directors and officers

Non-executive directors

Employees in a managerial or supervisory capacity

Stockholder, investors, creditors, banks

Supervisory board

The organization and its employees and volunteers


Allegation of a wrongful act

Costs and expenses of an insured i.e. defense costs

Financial losses where the insured is held liable

This is just a brief outline of all the threats that you could face as a nonprofit organization. Resource Partners is here to help guide you with all your risk management questions and insurance solutions