Your non-profit clients may believe they are less likely to have a D&O 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
The non-profit may bring suit against its directors and officers. Examples include claims by current management against a former trustee.
Beneficiaries
People and communities the non-profit helps may bring claims against directors and officers alleging wrongdoing.
Directors
A current director may sue another board member alleging violation of a duty owed to the organization.
Members
Members of the non-profit might bring suit against the directors and officers alleging harm to the interests of the members.
Donors
A donor providing funds to the non-profit may sue the directors and officers alleging misuse of funds or gifts.
Insiders
Current and former staff of the non-profit may bring suit against the directors and officers alleging wrongful termination, discrimination, sexual harassment, etc.
Outsiders
Outside organizations serving as a vendor or partner may allege harm caused by the non-profit 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 non-profit directors and officers alleging wrongdoing.
Government agencies or authorities
Government agencies and authorities may bring suit against non-profit 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 non-profit directors and officers alleging violation of state or federal laws.
For more information about Victor's Non-profit Management Liability program, connect with your business development contact or email managementliability.us@victorinsurance.com.