How Much Is Directors Liability Insurance For My Non-Profit In Canada?
It’s a fact that every business faces risk. And, when it comes to risk, non-profits are no different than corporations – that’s why it is important to understand “How much is directors liability insurance for my non-profit in Canada?” If your non-profit wants to attract and retain qualified business leaders to provide guidance and direction as board members, comprehensive directors insurance is baseline requirement for many professionals. Whether you are launching a new non-profit, reorganizing your current charity board or looking to recruit volunteers to join a board committee, our experienced insurance brokers can get you ALIGNED with an answer to “How much is directors liability insurance for my non-profit in Canada?”
Related Matters: IBC.ca – 11 Risk Management Opportunities for Directors & Officers
Here Are Some Real-World Examples Of Why You Need To Know How Much Is Directors Liability For My Non-Profit In Canada?
If there’s a conflict of interest. Did you know that a board director who is elsewhere employed or is a business owner might have a situation whereby their “day” job comes into conflict with their non-profit organization’s best interests? As part of their participation in a non-profit or charity, a board director will be privy to confidential and sensitive information as well as be personally responsible for maintaining privacy and confidentiality. This is why a director who needs to make public statements on behalf of their non-profit organization, needs to ensure that the statements are not only appropriately timed but that it contains appropriate content. Accepting services, gifts or favours that relate to a directors’ duties should not occur.
If there’s a policies &/or procedural problem. Every non-profit director needs to have a complete and thorough understanding of your operations, guidelines, policies, procedures and standards. This includes financials (reporting & related policies) as well as privacy and confidentiality of information and all materials. Any real or perceived misunderstanding could have a significant impact on your organization’s bottom line.
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If there’s an HR “situation”. Your non-profit has guidelines, standards, policies and procedures for all employees and your volunteer board directors need to also be fully aware of what constitutes unacceptable volunteer performance. With formal board director job descriptions and documentation of required experience, education and training, you can ensure that your non-profit directors are suitably prepared for their role as well as associated responsibilities.1
Directors Liability For My Non-Profit In Canada – Here’s How D&O Coverage Helps
According to the Insurance Bureau of Canada, “Organizations with paid or volunteer boards should be aware that directors and officers have very specific duties and obligations. Directors and officers should be given all of the appropriate information that is required to perform their duties effectively.”2 Here are three reasons why D&O insurance is so important for non-profits:
- Talent attraction. From day one, professionals want to be protected when they are volunteering their time and experience. If you are looking for individuals with the ICD professional designation from the Institute of Corporate Directors they’ll expect that your non-profit will provide comprehensive directors coverage.
- A stakeholder lawsuit. Interacting with a broad stakeholder group means that your non-profit is exposed to a broad range of risks. If any of your stakeholders decide to sue your directors &/or officers and allege breach of duty, your non-profits directors insurance will be in place to respond.
- Costly legal expenses. If a stakeholder lawsuit allegation triggers the wrongful act and claim definitions, your non-profit directors insurance will respond and cover legal expenses of your board directors as well as employees.
Our experienced team of business insurance brokers at ALIGNED Insurance can help you and/or your board answer the question “How much is directors liability for my non-profit in Canada?” as well as provide specific guidance on what your non-profit organization needs to do to ensure its directors are protected.
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Source(s): 1Insurance Bureau of Canada2 IBC.ca 11 Risk Management Opportunities for Directors & Officers