Benefits of D & O Insurance For Nonprofits

California nonprofit organizations provide essential social services that benefit the community and their members.  These organizations cannot survive without a board of directors to make major decisions on behalf of the organization.  Contact GDI Insurance Agency, Inc to find out more information on California D & O Insurance for Nonprofits 1-209-634-2929.

Guide to D&O Insurance

Even when acting in good faith, directors and officers of nonprofit expose themselves to risks with each decision they make on behalf of their organization.  In the event of a claim, nonprofit leaders could suffer severe damage to their reputation and personal finances simply based on their decisions.  In order to protect themselves, directors and officers or D & O insurance for nonprofit leaders is crucial and can provide the following benefits:

  • Legal Cost Reimbursement: In the event of a claim, D & O Insurance policies can provide defense cost coverage for a variety of claims.  Specifically, D & O insurance can provide legal cost reimbursement to nonprofit leaders following allegations of wrongful acts, financial mismanagement, errors in judgment and negligence. Because D & O Lawsuits can occur without warning and easily reach six figures, it’s critical that nonprofit leaders arm themselves with the right policy.
  • Peace of Mind: D & O claims can come from a variety of sources, including employees, recipients of services, government bodies and donors.  D & O insurance ensures that nonprofit leaders are protected regardless of where claims originate, providing timely and effective coverage.
  • Entity Coverage: A number of D & O policies go beyond protecting directors and officers and extend to the organization itself.  This is particularly advantageous, as this type of coverage kicks in even if a director or officer isn’t directly involved in a claim.
  • Flexible Limits: Most insurance companies offer a variety of coverage limits for  D & O insurance policies.  In some cases, these limits can go as high as $10 million, depending on the size of the nonprofit.
  • Protection Beyond Indemnification: While the bylaws of many nonprofits require the company to indemnify and defend directors and officers who are sued, leaders shouldn’t expect this protection to be sufficient.  That’s because a nonprofit’s duty to indemnify is only as good as its ability to pay.  This means that, if the nonprofit is insolvent or not financially stable enough to cover the legal fees, directors and officers would have to cover these fees themselves.

What Does a D & O Insurance for Nonprofits Policy Cover?


A California D&O insurance for nonprofits policy provides defense costs and indemnity coverage to the entity listed on the policy declarations, which may include:

  • Coverage for individual directors and officers
  • Reimbursement to the organization for a contractual obligation to indemnify directors and officers that serve on the board
  • Protection for the organization or entity itself.

A “fraud” exclusion is typically included in a D&O policy, which eliminates coverage for losses due to dishonest or fraudulent acts or omission, or willful violations of any statute, rule or law.

Want to Learn More About California D & O Insurance for Nonprofits?

Though you may not realize it, board members can be held liable for the actions of the nonprofit organizations they serve.  In order for a nonprofit to protect its company mission and its board member’s personal assets, D & O Insurance is crucial.  Contact GDI Insurance Agency, Inc. today 1-209-634-2929 for your quote.

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GDI Insurance

As one of the fastest growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more.

We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business. Contact us today 1-209-634-2929 for your comprehensive insurance quote!