Beimdiek Blog

D&O Who Needs It?

D&O insurance is becoming a more important item on the agenda for the simple fact that more and more nonprofits are being sued! - (Insurance Journal)

Directors & officers liability insurance, commonly referred to as D&O insurance, can be written to cover the directors and officers of for-profit businesses, privately held firms and not-for-profit organizations as well has educational institutions. The easiest explanation of this coverage is to think of it as “management errors and omissions liability coverage”, covering those individuals and providing legal defense for the decisions they make during their service on the board.

Many individuals don’t realize the potential threat they face while serving as a board member or trustee. D&O insurance is designed to protect those individuals serving from personal financial exposure.

In a for-profit organization external forces tend to monitor the performance and standards which dictate behavior by requiring reporting and oversight standards. But those external standards are often absent in a not-for-profit environment and many times those organizations are left to implement their own reporting and performance criteria which opens the door for risk.

In addition to lawsuits and judgments, the cost to defend an organization, its executives and volunteers can be devastating. According to a recent survey from Wyatt Nonprofit Organizational Directors’ and Officers’ Survey, the average cost to defend one of these lawsuits runs between $35,000 and $100,000 with the average indemnity around $457,000.

No doubt that in today’s highly litigious environment, nonprofit organizations and their board members face many difficult challenges, lawsuits, and alleged wrongdoings! There are no exceptions!

If you or your organizations have questions about this coverage or would like to learn more about our unique risk assessment process, call me at 417-358-4007 or email at

Written by Brent Westhoven

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