D&O insurance: Some FAQs for nonprofits

Directors and officers (D&O) liability insurance enables board members to make decisions without fear that they’ll be personally responsible for any related litigation costs. Such coverage is common in the business world, but many not-for-profits incorrectly assume that their charitable mission and the volunteer status of their board insulate them from lawsuits. To determine whether your nonprofit needs D&O insurance, consider the risks you may face (for example, financial mismanagement and self-dealing), the policy period and the claims insurers will reimburse.