Aon Association Services
Association Business Insurance Solutions
Directors’ & Officers’ (D&O) Insurance:
What you need to know.
September 5, 2012
Presented by Josh Srnka
Association Business Insurance Solutions
Disclaimer
• This presentation is not meant to suggest that any insurance policy
issued by any organization represented today would provide coverage
for any specific claim. Coverage for any particular claim depends on
the circumstances of the claim and the language of the relevant policy.
• Any name or image that bears any resemblance to any person, real or
fictional, is purely coincidental.
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Association Business Insurance Solutions
Agenda
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Responsibilities / Basic Duties
Management Liability Insurance
What is D&O Insurance?
Who’s Covered?
What’s Covered?
Common D&O Claims
Mitigating Risk
Q&A
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Association Business Insurance Solutions
Responsibilities / Basic Duties
• Nonprofit organizations should be operated and managed with at least
the same degree of care as for-profit corporations.
• Directors and Officers are subject to three basic duties in executing
their obligations:
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Duty of Care – act prudently
Duty of Loyalty – act in the best interest of the organization
Duty of Obedience – adhere to the organization’s bylaws
Association Business Insurance Solutions
Management Liability Insurance
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Directors and Officers (D&O) Liability Insurance
Employment Practices Liability Insurance (EPLI)
Professional Liability Insurance – Errors & Omissions (E&O) Coverage
Fiduciary Liability and/or Employee Benefits Liability
Crime and/or Fidelity Coverage
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Association Business Insurance Solutions
What is D&O Insurance?
• Protects an association against allegations of mismanagement, neglect
or breach of duty as it relates to the management of the organization.
• A crucial component of Nonprofit D&O insurance is the protection for
the association against employee related allegations – including
allegations of discrimination, wrongful termination and sexual
harassment, as well as failure to hire or promote.
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Association Business Insurance Solutions
Who is covered?
The D&O insurance policy Definition of Insured usually includes….The
Entity, as well as past, present & future Directors, Officers, Committee
Members, Trustees, Employees & Volunteers. The heirs, executors,
administrators and legal representatives of an Insured, in the event of
an Insured’s death, insolvency or bankruptcy.
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Association Business Insurance Solutions
What is covered?
Coverage typically Includes:
• Employment Practices Liability Insurance (EPLI)
o Discrimination (Race, Gender & Age)
o Wrongful Termination
o Harassment
• Personal Injury (Libel, Slander & Defamation of Character)
• Publisher’s Liability (Copyright or Trademark Infringement)
• Mismanagement of the association’s funds
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Association Business Insurance Solutions
Common D&O Claims
• Employee / Employer Disputes
o Discrimination
o Wrongful Termination
o Sexual Harassment
o Failure to Hire or Promote
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Alleged Anti-Trust Violations
Membership Disputes
Standard Setting, Certification, and Peer Review
Defamation
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Association Business Insurance Solutions
Mitigating D&O Risk
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Remember the three duties (care, loyalty & obedience)
Document, document, document
Legal counsel
EPLI Website
Does it sound right / Cooling off period
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Association Business Insurance Solutions
Questions??
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Association Business Insurance Solutions
Contact Information
Josh Srnka
Account Executive
Aon Association Services
1120 20th Street, NW, 6th Floor
Washington DC, 20036
Phone: 202.429.8543
Email: josh.srnka@aon.com
Website: asae-aon.com
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