The last decade has seen a significant increase in nonprofit liability claims. Because the resources of many organizations are insufficient to provide the most desirable support, directors and officers may be vulnerable. Axis management liability coverage can protect the management team and defend the organization from claims that may result in millions of dollars in jury awards and settlements.
The nonprofit sector has two predominant types of organizations, and each has different forms of exposure for their directors and officers. A public benefit nonprofit is the most recognized. It exists to serve the community, either as a whole or focus on a specific segment. Many familiar organizations fit into this charitable scope:
- Civic groups
A mutual benefit nonprofit is formed to serve its members. Some organizations that may be categorized within this sector include:
- Athletic clubs
- Credit Unions
- Trade Associations
It’s been estimated that almost 20 percent of US corporations have filed as nonprofit. Many of the directors and officers are not business people. Countless directors and officers serve the nonprofit on a part-time basis and receive little or no financial compensation. They may not know that they have meaningful exposure to liability claims. Axis management liability coverage can protect against lawsuits brought in response to actions and decisions made by the Board of Trustees and management.