The Directors & Officers (D&O) Liability policy is often confused with General Liability, which covers bodily injury, property damage, and personal injury claims even if brought against a director or officer. A D&O policy protects an organization and its individual officers and directors for a wide variety of possible claims ranging from malfeasance by an officer in their fiduciary duty to the organization, third-party discrimination, and, where applicable, employment issues. The D&O policy was designed by Holmes Murphy to ensure that the unique exposures of a fraternal organization are addressed.

In today’s litigious society, the savvy non-profit entity recognizes the need for D&O Liability coverage. These are the facts:

• Non-profit organizations are not immune to costly litigation.
• Employment-related suits, such as harassment and wrongful termination, are at an all-time high. Coverage for these claims is not provided by the General Liability or Workers’ Compensation coverage of the chapter or house/alumni corporation.
• Directors and officers are subject to duties of diligence, obedience, and loyalty and can be sued for negligence in the performance of those duties.
• A claim could threaten the personal assets of directors, officer, and trustees.
• The financial burden of defending a D&O lawsuit can drain a non-profit organization’s badly needed resources.

We offer a D&O product designed specifically to you. It includes:

• Modification of the Insured v. Insured exclusion to ensure a national organization is properly protected against claims brought by local affiliated organizations or members.
• Amended settlement clause.
• Coverage to defend breach-of-contract allegations.
• Coverage for crisis management expenses.
• Coverage for a loss arising from a fiduciary claim.
• Coverage for the cost to defend a claim related to a violation of the Fair Labor Standards Act.
• HR Loss Prevention services.

• Donors who feel their contributions have not been used to further the expressed aim of the organization.
• Board members who disagree with a majority decision on the use of funds.
• Members of the organization who believe they have been wrongfully expelled from the organization.
• Employees of local chapters and national fraternity alleging wrongful termination, discrimination, or harassment.

Myth: A non-profit organization is well protected with a traditional corporate D&O policy. Truth: Policies not written specifically for non-profits usually have too many exclusions and limitations to provide the necessary protection.

Myth: Comprehensive General Liability insurance fully covers D&O claims. Truth: Comprehensive General Liability insurance provides limited coverage in the typical D&O claims situation. For example: Directors and trustees usually are not afforded coverage, and many carriers are excluding employment-related claims altogether.

Myth: State enacted legislation offers complete protection from D&O claims. Truth: These statutes provide only limited protection on a state level and no protection for violations of federal law.