Directors and Officers insurance for a medium-size dance organization with a volunteer BOD
7 Jun
2019
7 Jun
'19
9:22 p.m.
North Bay Country Dance Society (NBCDS) is a medium-size CA dance organization (about 90
dances per year - contra, ECD, family, Morris team, two dance weekends), a CDSS affiliate,
with a volunteer Board of Directors. NBCDS has been around 25 years. Our Board is
discussing whether to purchase Directors and Officers liability insurance. We have a quote
from a local broker for a $1 million limit of liability, claims-made policy with a $5,000
deductible for annual cost of $850. Reputable insurance company - same one which provides
general liability coverage for NBCDS through CDSS insurance program. We've researched
D&O, understand what it covers and what it doesn't, had one Board discussion
without a decision. Not a cost we couldn't cover but not insignificant either.
Arguments for obtaining coverage - protects individual Board members thereby encouraging
participation, particularly among higher net-worth individuals; provides for defense costs
in case of frivolous suits. Arguments for not obtaining coverage - 1) our 25 year history
of having no actions taken against us; 2) the fact that our mandate is so narrow - we put
on dances; 3) the people who come to our dances understand that they are social events
and we don't seek a community with special needs or vulnerabilities; 4) we're an
all-volunteer run enterprise; 5) we don't make (much) money which makes us much less
of a target; 6) if there was a suit, it is unlikely that personal assets would be sought.
Do any of you involved with similar non-profit organizations have information to share
about D & O coverage? Do you have it/thought about getting it? Decided not to get it?
Know of any dance/music/song organizations and their Board of Directors which have faced a
suit of any kind which would be covered by D & O insurance? Thanks.
7 Jun
7 Jun
11:36 p.m.
Country Dance New York (CDNY) has D&O, obtained through the same broker as
our liability insurance (New York Council of Nonprofits, the organization
for nonprofits in New York - similar organizations are across the country).
$797 last year. It was a close call when we decided to go with it. On one
hand I have never heard of a claim against an organization like ours, and
think it is generally unlikely there would be one. On the other hand, we
have accumulated some resources over the last 30 years and it would be a
shame to lose them to lawyers' fees even if we won. It also protects
individual board members, which can be an asset in recruitment (though not
so much in our community, where most dancers don't have all that much, or
know that much about insurance). I read some articles pro and con and
vacillated for years, but I don't remember what the final argument in favor
was. With luck one will never need it, like most insurance - but it seems
useful to be able to make life simpler in case an issue comes up - there
would be lawyers for the insurance company that would take most of the
burden (though one has to recognize that their best interests, as with most
insurance, are not necessarily our best interests).
On Fri, Jun 7, 2019 at 5:22 PM Craig Meltzner via Organizers <
organizers(a)lists.sharedweight.net> wrote:
North Bay Country Dance Society (NBCDS) is a
medium-size CA dance
organization (about 90 dances per year – contra, ECD, family, Morris team,
two dance weekends), a CDSS affiliate, with a volunteer Board of Directors.
NBCDS has been around 25 years. Our Board is discussing whether to purchase
Directors and Officers liability insurance. We have a quote from a local
broker for a $1 million limit of liability, claims-made policy with a
$5,000 deductible for annual cost of $850. Reputable insurance company –
same one which provides general liability coverage for NBCDS through CDSS
insurance program. We’ve researched D&O, understand what it covers and what
it doesn’t, had one Board discussion without a decision. Not a cost we
couldn’t cover but not insignificant either.
*Arguments for obtaining coverage* – protects individual Board members
thereby encouraging participation, particularly among higher net-worth
individuals; provides for defense costs in case of frivolous suits. *Arguments
for not obtaining coverage* – 1) our 25 year history of having no
actions taken against us; 2) the fact that our mandate is so narrow - we
put on dances; 3) the people who come to our dances understand that they
are social events and we don't seek a community with special needs or
vulnerabilities; 4) we're an all-volunteer run enterprise; 5) we don't make
(much) money which makes us much less of a target; 6) if there was a suit,
it is unlikely that personal assets would be sought.
Do any of you involved with similar non-profit organizations have
information to share about D & O coverage? Do you have it/thought about
getting it? Decided not to get it? Know of any dance/music/song
organizations and their Board of Directors which have faced a suit of any
kind which would be covered by D & O insurance? Thanks.
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Organizers(a)lists.sharedweight.net
http://lists.sharedweight.net/listinfo.cgi/organizers-sharedweight.net
8 Jun
8 Jun
1:06 a.m.
BACDS has at least once had a potential board member decline because he was afraid of
losing his house. When we looked into D&O insurance then (10+ years ago) it seemed
ruinously expensive, maybe because the org was losing money annually at the time. The
recommendation we were given then was to get a rider on our individual homeowner's
insurance, which I lackadaisically looked into but didn't do anything about. (My
employers have a group legal benefit which I've signed up for, so for a small monthly
fee you get representation without per-incident charges, and I'd start there if I got
sued as a Board member.)
-- Alan
On 6/7/2019 2:22 PM, Craig Meltzner via Organizers wrote:
North Bay Country Dance Society (NBCDS) is a medium-size CA dance organization (about 90
dances per year – contra, ECD, family, Morris team, two dance weekends), a CDSS affiliate,
with a volunteer Board of Directors. NBCDS has been around 25 years. Our Board is
discussing whether to purchase Directors and Officers liability insurance. We have a quote
from a local broker for a $1 million limit of liability, claims-made policy with a $5,000
deductible for annual cost of $850. Reputable insurance company – same one which provides
general liability coverage for NBCDS through CDSS insurance program. We’ve researched
D&O, understand what it covers and what it doesn’t, had one Board discussion without a
decision. Not a cost we couldn’t cover but not insignificant either.
Arguments for obtaining coverage – protects individual Board members thereby encouraging
participation, particularly among higher net-worth individuals; provides for defense costs
in case of frivolous suits. Arguments for not obtaining coverage – 1) our 25 year history
of having no actions taken against us; 2) the fact that our mandate is so narrow - we put
on dances; 3) the people who come to our dances understand that they are social events
and we don't seek a community with special needs or vulnerabilities; 4) we're an
all-volunteer run enterprise; 5) we don't make (much) money which makes us much less
of a target; 6) if there was a suit, it is unlikely that personal assets would be sought.
Do any of you involved with similar non-profit organizations have information to share
about D & O coverage? Do you have it/thought about getting it? Decided not to get it?
Know of any dance/music/song organizations and their Board of Directors which have faced a
suit of any kind which would be covered by D & O insurance? Thanks.
_______________________________________________
Organizers mailing list
Organizers@lists.sharedweight.net<mailto:Organizers@lists.sharedweight.net>
http://lists.sharedweight.net/listinfo.cgi/organizers-sharedweight.net
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2 comments
3 participants
participants (3)
-
Craig Meltzner -
David Chandler -
Winston, Alan P.