Villages Directors & Officers Liability

Below are just a few reasons to have Philadelphia Insurance Companies Non-Profit D&O Protection:

1.  Optional selection of counsel – Insured may choose defense counsel or tender
the defense to the Underwriter
2.  Defense Costs are in addition to the Limit of Liability
3.  Most favorable venue wording for punitive, multiple, or exemplary damages
4.  Full severability for Individual Insureds; expanded severability for the Insured organization
5.  Automatic Acquisitions coverage for non-profit entities coming within Insured
organization’s control during the policy period (up to 35% of assets)
6.  Personal & Advertising Injury coverage

While the risk is low for D&O claims on most non-profits, there is a potential for claims. Below is a list of a few types of claims that are more common then you might think. Especially the second claim scenario. I have seen numerous non-profits give contracts to friends of the non-profit without going through a proper bidding process.  Example, you have a golf tournament to raise funds and one of the committee members is in the promotional business so you give him the contract to produce gift baskets, t-shirts, pens, etc. The problem is there may be other members or volunteers who have the same type of business and may have been able to get you the products or services at a lower rate.

The other two claim scenarios show that even if you win a case you can still have defense costs that you want to have covered.


$100,000 defense cost only
Two years after 5 acres of property was donated to a foundation,
the donor sought to revoke his donation. The insured had
already begun to develop the property as a residence for
disabled children. While the judge found in favor of the insured,
significant costs were incurred.

 A potential vendor alleged that bidding was rigged when they
did not receive a contract for an annual fundraising event.

$65,000 Misappropriation of Funds
A grant making foundation receiving private
donations was alleged to have used those funds
for purposes not associated with the foundation’s
underlying mission.

$75,000 defense costs only
 A group of association members filed a lawsuit alleging the
recent election of a new board President did not follow the
association bylaws. Members argued that the 51% majority vote
required was not obtained for the election to be valid.

The above descriptions of coverage are intended to be an overview only.  They are not binding. Only the actual insurance policies when issued will determine what coverages are provided and excluded by the insurance carriers.