Non-profit organizations may believe they are less likely to have a directors & officers liability claim because they don’t have shareholders. However, non-profits work with a wide variety of individuals and organizations that could be a potential claimant in a suit brought against their directors and officers.
Who sues non-profit organizations?
The entity
Current management or employees, on behalf of the non-profit organization, may bring suit againsts its directors and officers.
Creditors
Creditors of the non-profit organization may claim a breach of fiduciary duty based on the solvency of the insured.
Beneficiaries
People and communities a non-profit organization helps may bring claims against directors and officers alleging wrongdoing.
Directors
Current and former directors may sue another board member alleging violation of a duty owed to the organization.
Donors
A donor providing funds to a non-profit organization may sue its directors and officers, alleging misuse of funds or gifts.
Insiders
Current and former staff of a non-profit organization may bring suit against its directors and officers, alleging wrongful termination, discrimination, sexual harassment, etc.
Vendors & suppliers
Outside organizations serving as a vendor or supplier may allege harm caused by a non-profit organization or its directors, officers or employees.
State Attorney General
The State Attorney General represents the interests of the general public in ensuring proper management of public corporations. The State Attorney General may bring suit against a non-profit organization's directors and officers, alleging wrongdoing.
Government agencies or authorities
Government agencies and authorities may bring suit against a non-profit organization's directors and officers, alleging violation of state or federal laws or misappropriation of government funds.
Other government officials
Representatives of the IRS, Department of Labor, and others may bring suit against a non-profit organization's directors and officers, alleging violation of state or federal laws.
For more information, email managementliability.us@victorinsurance.com or connect with your business development contact.