Leading with Confidence: Safeguard Your Management Team

As a non-profit organization or business leader, you’re the one charting the course, navigating through challenges and always pushing towards those big-picture goals. You’re making those tough decisions every day, which comes with an immense amount of responsibility and pressure. What happens if you suddenly find yourself under the microscope, facing accusations of negligence or wrongdoing?

That’s where Directors and Officers Insurance, commonly known as D&O insurance, comes into play. In a nutshell, this specialized form of insurance protects the key decision-makers within your organization – the directors and officers – from personal losses if they are sued as a result of serving your company or nonprofit.

Key Takeaways:

  • Directors and Officers (D&O) insurance protects key decision-makers from personal losses if they’re sued while serving your organization.
  • Most D&O policies will not cover losses or legal fees due to fraud or criminal offenses 
  • D&O insurance can help pay for losses linked to a lawsuit, including those hefty legal defense fees.
  • “Side A” coverage within D&O insurance is like a safety net for directors and officers when the company can’t, or won’t, foot the bill for indemnification.
  • “Side B” coverage helps when the organization does agree to cover indemnification costs.
  • “Side C” coverage, also known as “entity coverage,” is like an umbrella that extends coverage to the organization itself, not just the individuals at the helm.
  • D&O insurance is vital for nonprofits, family businesses, and startups, offering peace of mind amid legal uncertainties.

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Discover Affordable Coverage!

Whether you’re ready to receive a personalized quote for D&O Insurance or simply have questions about coverage options, our team at Peoples First Insurance is here to help. No matter where you are in your insurance journey, feel free to reach out to us for expert guidance and assistance tailored to your unique needs.

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Who Can Benefit From D&O Insurance Coverage?

Don’t be fooled into thinking that D&O insurance is a luxury only large corporations or vulnerable nonprofits need. This type of coverage is essential for organizations of all shapes and sizes. Why? Because wherever there are key decision-makers, there’s potential risk. Here are a few examples of who could greatly benefit from D&O insurance:

  • Nonprofit Organizations: Despite the best of intentions, even nonprofits can find themselves facing legal accusations. From managing donations to organizing events, there’s a lot of responsibility on the shoulders of nonprofit leaders, making D&O insurance crucial.
  • Small Businesses: Small business owners often wear many hats, including director and officer roles. If a decision leads to a lawsuit, D&O insurance can protect personal assets and the health of the business.
  • Startups: Startups often deal with high-risk decisions that could lead to legal repercussions. Having D&O insurance allows founders to innovate and take risks without fear of personal financial ruin.
  • Board Members of Homeowners or Condo Associations: Association board members can be held personally responsible for decisions made on behalf of the community. D&O insurance can safeguard their personal liability.
  • Private Companies: Even private companies aren’t immune from litigation. From human resource issues to shareholder disputes, D&O insurance is a wise investment to protect against personal and company loss.
  • Educational Institutions: School board members and administrators make important decisions that could lead to disputes. D&O insurance provides essential coverage for these key decision-makers.

Why Do I Need Directors and Officers Liability Insurance?

If you think corporate scandals are the stuff of headlines, you’re not wrong. But here’s a surprise: they’re a lot more common than you might think, and they can come with a pretty hefty price tag.

Directors and Officers Liability Insurance fills an essential coverage gap that isn’t typically addressed by a general liability policy. Unlike the latter, D&O insurance is specifically designed to protect you and your team from claims related to “wrongful acts” such as alleged errors, neglect, or breach of duty.

For instance, let’s say you’re at the helm of a manufacturing company and you tell your supplier to stock up as you’re expecting a spike in production. But then, things change, and you end up increasing inventory with a different supplier. If your original supplier decides to sue for damages due to your change of plans, a D&O policy can help you navigate through the legal storm.

Here are some of the common reasons why directors and officers might face a lawsuit:

  • Breaching responsibilities or duties that lead to financial turmoil or even bankruptcy
  • WOffering misleading information or inaccurately portraying company assets
  • Inappropriate or unauthorized use of company resources
  • Failing to adhere to regulations governing the workplace
  • Unlawfully taking or using intellectual property, or aggressively targeting a competitor’s clientele
  • Insufficient or ineffective management and governance within the company

According to St. Paul Travelers, statistics show that shareholders and employees are the most likely groups to sue private companies. Other parties may include corporations against themselves, and a variety of third parties, such as competitors, creditors and regulatory bodies.

Protecting More Than Just Boats

Peoples First Insurance is here to assist you in finding protection not only for your boat but for a wide range of personal watercraft as well. Whether you own a jet ski, kayak, WaveRunner, or commercial charter boat, we can help you secure the right coverage to keep you and your equipment safe on the water. Here are just a few of the personal watercraft we also can find coverage for:

Keep in mind that D&O Insurance typically doesn’t extend to cover illegal activities or unethically earned profits. This “fraud” exclusion eliminates coverage for losses due to dishonest or fraudulent acts, or willful violations of any statute, rule or law.

What Does D&O Insurance Cover?

Navigating the landscape of D&O insurance can feel a bit like trying to find your way through a dense forest, but that’s where we come in. D&O insurance can be customized to fit your needs, and while policy forms might vary from one carrier to another, there are some general types of coverage you should know about. But don’t worry if it all sounds confusing – we’re here to help make it clear. Here are some of the key aspects that a typical D&O Insurance policy provides coverage for:

  • Personal Liability: D&O insurance covers directors and officers for personal losses if the organization is unable to indemnify them.
  • Legal Fees: D&O insurance covers the legal defense costs if directors and officers are sued for a wrongful act.
  • Company Reimbursement: If the organization indemnifies its directors and officers and pays for their defense costs or settlements, D&O insurance can reimburse the organization.
  • Entity Coverage: D&O insurance can extend to cover the organization itself against direct claims.
  • Claims from Wrongful Acts: D&O insurance provides coverage for a wide range of “wrongful acts,” including alleged errors, misleading statements, omissions, neglect, or breach of duty.

Types of Directors and Officers Insurance Coverages

A typical D&O insurance policy usually includes three main types of insuring agreements, often referred to as Side A, Side B, and Side C. Each type of coverage plays a unique role in creating a comprehensive protection plan:

Side A Coverage: Side A coverage is all about the individual. If a director or officer is sued for a wrongful act and the company cannot or will not indemnify them, Side A steps in to cover their legal defense costs, settlements, or judgments.

Side B Coverage: Side B takes the burden off the organization. If the organization indemnifies its directors and officers and pays for their defense costs or settlements, Side B coverage can reimburse the organization for these expenses.

Side C Coverage: Side C, or entity coverage, broadens the scope to the organization itself. It provides coverage for claims made directly against the company, ensuring that both the leadership and the organization as a whole are protected.

Enhancing Your Coverage: Employment Practices Liability and Fiduciary Liability

When structuring your D&O Insurance policy, there are additional coverages that can be endorsed to further safeguard your organization and its leaders. Two such important additions include Employment Practices Liability (EPL) and Fiduciary Liability.

Employment Practices Liability coverage, when endorsed to your D&O policy, broadens its protection. This can cover claims related to employment practices, such as wrongful termination, discrimination, or harassment. However, it’s worth noting that EPL endorsements typically do not offer a duty to defend clause and are subject to a sizable deductible. Moreover, EPL endorsements often do not provide a separate limit of liability, meaning if a claim depletes your D&O policy limit, personal assets of a director or officer could potentially be at risk.

Fiduciary Liability coverage addresses potential liabilities related to the Employee Retirement Income Security Act (ERISA). ERISA stipulates that fiduciaries are personally accountable for losses to a benefit plan incurred because of alleged errors, omissions, or breach of their fiduciary duties. Fiduciary Liability coverage can serve as a financial safety net for such circumstances.

As always, we encourage you to reach out and speak to our team to help you navigate these complexities. We can guide you in customizing a policy that best suits your organization’s unique needs and risk profile.

Directors and Officers Insurance for Florida Nonprofits

As a nonprofit, your mission is the driving force behind everything you do. However, the need for safeguarding against potential litigation should not be overlooked, and that’s where D&O Insurance comes in. We understand that you’re doing invaluable work in the community and financial resources might be tight. But leaving your organization and its leaders unprotected is not a risk worth taking.

The good news? There are ways to make this coverage more affordable. Here are some strategies to help make D&O insurance fit into your budget:

  • Prioritize Key Provisions: As suggested by the Nonprofit Risk Management Center, you can select only the most critical policy provisions to minimize the annual premium. For instance, if your nonprofit is run solely by volunteers and doesn’t have paid staff, you might not need employment practices coverage until you bring on staff.
  • Consider Premium Financing: If the thought of a lump sum premium feels overwhelming, ask about premium financing options. This could enable you to spread the cost over time rather than having to manage a large upfront payment.
  • Involve Board Members in Premium Costs: Some nonprofits defray the cost of premiums by asking board members to contribute towards the policy cost. While this isn’t suitable for all nonprofits, it’s an approach worth considering if the circumstances are right.

And remember, we’re always here to chat, provide advice, and help you find the right coverage to fit your unique needs. Because at Peoples First, we truly believe in people helping people.

Partner with Us for Your Directors and Officers Insurance Needs

At Peoples First Insurance, we’re here to help protect you, your leadership, and your mission. Whether you’re running a nonprofit, a privately held company, or a public corporation, the benefits of a tailored D&O policy are undeniable. But we understand that there’s no “one-size-fits-all” policy.

That’s why our team of experienced and professional agents is on hand to guide you through the process. We pride ourselves on understanding your organization, its unique risk profile, and how we can craft policy language to best meet your needs. We’re not just selling insurance; we’re creating robust shields for your organization and its leaders, so you can focus on what you do best without worrying about potential liability.

So, don’t hesitate. Contact us today at 850-770-7047 to learn more about safeguarding your company with comprehensive Directors and Officers Liability Insurance. We’re looking forward to helping you lead with confidence.


What does D&O insurance not cover?

While D&O insurance provides wide coverage, it typically does not cover intentional illegal acts, fraudulent activities, or any personal profiting in violation of the law by directors or officers. Policies also generally exclude bodily injury and property damage claims.

How much does D&O insurance cost?

The cost of D&O insurance varies widely, as it depends on several factors, such as the organization’s size, industry, location, claim history, and the amount of coverage desired. For a personalized quote tailored to your organization’s needs, it’s best to contact an insurance professional.

How much nonprofit Directors and Officers insurance do I need?

The amount of D&O insurance required for a nonprofit depends on various factors like the size of the organization, its operating budget, the nature of its activities, and potential risks. Each nonprofit organization is unique, and it is recommended to consult with an insurance professional to determine appropriate coverage levels.

Who can bring a D&O lawsuit?

D&O lawsuits can be brought by a variety of parties, including employees, volunteers, donors, members, competitors, government bodies, and the nonprofit organization or company itself.

What is Employment Practices Liability (EPLI) coverage?

EPLI coverage provides protection against claims made by employees alleging discrimination, wrongful termination, harassment, or other employment-related issues. It can be an integral part of a D&O policy or standalone coverage, based on an organization’s needs.

How can D&O insurance protect you from financial loss?

D&O insurance protects you from financial loss by covering defense costs, settlement expenses, and any damages awarded in a lawsuit filed due to alleged wrongful acts in managing a company. Without this coverage, individuals and the organization could face significant out-of-pocket costs.

What counts as an officer or director of a company?

An officer or director of a company is typically someone in a leadership position who has decision-making authority. This could include the CEO, CFO, president, board members, or any other individual who holds a key position of responsibility within the company or organization.

What type of insurance does a nonprofit organization need?

Nonprofit organizations typically need several types of insurance coverage, including General Liability Insurance, Professional Liability Insurance, Workers’ Compensation Insurance, and Directors and Officers Insurance. The exact requirements can vary depending on the nature of the nonprofit’s activities, its size, and other risk factors. Consulting with an insurance professional can help determine the best coverage for a nonprofit’s unique needs.