CalNonprofits Insurance Services

YIKES! Did That Really Happen?

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May 5, 2017

A nonprofit foundation received a generous donation of several acres of property. The property was put to good use as the foundation began to develop the grounds for use as a residence for disabled children.

Two years into the project, the donor attempted to revoke the donation – claiming fraud on the part of the foundation!

The bad news

The litigation took months to come to a conclusion – during which all progress on the project came to a standstill.

The good news

The judge eventually ruled in favor of the foundation. Luckily, they had a strong Directors and Officers policy in place, which was able to cover the costs of legal representation.

Directors and Officers (D & O) Insurance covers the organization’s directors, officers and trustees against actual or alleged wrongful acts in governance liability, fiduciary liability and employment practices liability, including fraud, financial mismanagement, employment practice allegations, improper board elections, improper fundraising allegations and more. There is no standard forms for D & O policies, each company will offer different terms and conditions. It’s important to understand the coverage details of each policy and the options available to your agency.

We strongly recommend D & O coverage for all nonprofits. Schedule a policy/coverage review with your CalNonprofits Insurance Services Account Manager today!

About the Author

  • Founded in 1984 as a subsidiary of the California Association of Nonprofits (CalNonprofits), CalNonprofits Insurance Services was established during a time of diminishing insurance options for nonprofits. One of the driving reasons for establishing the association was to use the collective influence of the sector to secure more stable and quality insurance. We have developed, and are known for, our wide spectrum of services reflecting expertise in both the insurance and nonprofit sectors, our superior customer service, and our development of exclusive insurance products, including a highly successful dental and vision trust. We insure more than 1,200 nonprofit organizations throughout California and we are the only California brokerage specializing in insurance for nonprofits. Our clients range from newly established nonprofits all the way to venerable organizations with multiple locations statewide.

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