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Charities typically use insurance to minimize the risks of loss or liability related to property, directors and officers, charitable activities, lawsuits, or abuse. Health or life insurance may also be used to care for employees.

Traditional general liability insurance affords a degree of protection for the organization against legal liabilities arising out of bodily injury, damage to third party property, and personal injury (i.e., libel, slander, and defamation of character). Coverage can be extended to include the directors, officers, trustees, employees, members, and volunteers of the organization as additional insureds.  However, many board members are still unaware that there is a growing number of claims against charitable organizations that are not covered by a General Liability policy. Examples include wrongful dismissal, discriminatory practices, disciplinary actions, financial mismanagement, misuse of designated funds, and breach of fiduciary duties.

By arranging a Directors and Officers Liability Insurance Policy, your organization can gain the following advantages:

  • personal protection for your directors and officers
  • protection for the organization should your bylaws require indemnification of the directors in the event of legal liability
  • coverage for legal and defence costs associated with a liability claim
  • access to legal advice and services from experienced professionals in the event of a claim   

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