Uncertain funding due to a weak economy calls for federal action, possible employee layoffs and insurer bailouts. After showers of April gloom, has there ever been a better time than now for non profit organizations to seek Directors and Officers and Employment Practices Liability Insurance?
Tax time also brought the IRS’ biggest changes for the tax-exempt sector in 30 years. Non profits could see claims by donors or governmental agencies that fund them due to a lack of transparency, accountability and tax compliance.
They must now answer whether they have:
Implemented the IRS’ Best Practice Policies for Whistle-blowers, Conflicts of Interest and Document Retention and Destruction
Engaged in lobbying or political campaign activities, transactions with interested persons or major dispositions of assets
Complicated compensation arrangements, funding grants, non-cash contributions or tax-exempt bonds
Moreover, the government, plan administrators and participants or their beneficiaries may also file claims under Fiduciary Liability against those who:
Exercise discretionary authority or control in managing or disposing the assets of plans covered by the Employee Retirement Income Security Act (ERISA)
Render investment advice for a fee or other compensation with respect to monies or property belonging to those plans
Even before these latest concerns, Directors and Officers were not immune from claims. Non profits remain more likely to have an Employment Practices claim than one resulting from General Liability. Rainy day funds are not the answer to these woes: the annual budgets of 85% of non profits are less than the average cost to defend a claim closed by litigation.
There has never been a better time to grow your Professional Lines book of business with our Non Profit Directors and Officers and Employment Practices Liability product.
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