Leaders make daily decisions that impact the success of your non-profit. As a leader, these members are expected to accept the same guidelines and duties that the heads of major corporations follow: the duties of diligence, loyalty and care.
Despite training and having the best interests of the non-profit at heart, mistakes can happen. When errors occur, volunteers, employees and even outsiders may question the decisions of your leaders.
Costly claims can follow board members’ choices, especially if a decision leads to a financial burden on the non-profit. These claims of mismanagement or breach of fiduciary duties can threaten the personal assets of your non-profit, as well as your directors, officers and trustees.
Who Can File a Claim
Unfortunately, many people with a range of involvement in your non-profit can file claims of mismanagement or breach of fiduciary duties, including:
- Volunteers who feel that their contributions have not been used to further the aim of the organization.
- Volunteers who disagree with a majority decision on the use of funds.
- Beneficiaries who feel they are entitled to more than they receive.
- State Attorney Generals who institute legal proceedings against the board for issues such as mismanagement of funds.
- Ex-volunteers who claim they were discriminated against.
Protecting Your Leadership
Protecting your leadership is critical for financial well being and peace of mind. With Directors and Officers (D & O) Liability insurance from Lockton Affinity, your board members and their personal assets are protected. D & O coverage defends against a variety of allegations.
D & O coverage also extends coverage to past, current and future board members. Knowing their personal assets are always protected, your board members can do their job with peace of mind.