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!