A D&O Product Tailored for the Unique Needs of a Fraternal Organization 

 

□        Defense and investigation cost paid outside the policy limit on an unlimited basis.  

 

□        Affordable Affiliate Organization Extension of Coverage endorsement allowing blanket protection for all undergraduate and alumni affiliates.  

 

□        $15,000 sub limit provided for litigation arising from un-assumed contractual liability to ensure affiliated organizations that are not parties to a contract but are sued under the theory of Breach of Contract.  

 

□        Modification of the Insured v. Insured exclusion to ensure a National Organization is properly protected against claims brought by local affiliated organizations.  

 

 Why Is Non-Profit D & O Insurance Important? 

 

□        In today's litigious society, the savvy non-profit entity recognizes the need for Directors & Officers Liability Coverage. These are the facts:   

 

□        Non-profit organizations are not immune from costly litigation.   

 

□        Employment related suits such as harassment and wrongful termination are at an all time high. Coverage for these claims is not provided by the General Liability or Workers' Compensation coverage of the chapter or house/alumni corporation.   

 

□        Directors and Officers are subject to duties of diligence, obedience and loyalty and can be sued for negligence in the performance of those duties.   

 

□        A claim could threaten the personal assets of directors, officers, and trustees.   

 

□        The financial burden of defending a D & O lawsuit can drain a non-profit organization's badly needed resources.   

Don't fall prey to the following misconceptions:  

□        A non-profit organization is well protected with a traditional corporate D&O policy.

Probably Not:  Policies not written specifically for non-profits, usually have too many exclusions and limitations to provide the necessary protection.

 

□        Comprehensive General Liability insurance fully covers D & O claims.

Definitely Not: Comprehensive General Liability insurance provides limited coverage in the typical D & O claims situation. For example, directors and trustees usually are not afforded coverage, and many carriers are excluding employment related claims altogether.

 

□        State enacted legislation offers complete protection from D & O claims.

Not Really: These statutes provide only limited protection on a state level and no protection for violations of federal law.

  

 

          Exposures to Directors & Officers: What do you need to know?

          (pdf format)   

 

 

 Who Brings Claims Against Non-Profit Organizations? 

 

□        Donors who feel that their contributions have not been used to further the expressed aim of the organization.   

 

□        Board members who disagree with a majority decision on the use of funds.   

 

□        Beneficiaries who feel they are entitled to more than they receive  

 

□        Government institutions who start legal proceedings against a board for issues such as mismanagement of funds.   

 

□        Members of the organization who believe they have been wrongfully expelled from the organization.  

 

□        Employees of local chapters and national fraternity alleging wrongful termination, discrimination or harassment.   

 

 

 Claim Scenarios  

 

□        The Fraternity Board sells the chapter house and invests in a newer, better building. They were sued for wasting the assets of the trust.   

 

□        The cook sues the Alumni Board claiming they were negligent for failing to supervise the undergraduate brother, who she claimed had sexually harassed her.   

 

□        A member sues the local chapter and National Fraternity alleging he was wrongfully expelled from the fraternity and sustained damages to his reputation as a result.  

 

□        Male attendees at a chapter social function allege discrimination based upon sex due to the requirement they pay a cover charge while female guest are allowed to attend for free.  

 

□        The alumni directed the undergraduates to terminate a contract with a caterer for meal service at the chapter house prior to the beginning of the semester due to the caterer failing to secure appropriate liability and work comp insurance for his catering business. The caterer sues the local chapter, alumni volunteers and national fraternity alleging breach of contract.  

 

 

 

A premium indication for coverage can be obtained by contacting:

Marketing Department 

HRH/Kirklin & Co, LLC.
12231 Emmet Street, Suite 5
Omaha, NE 68164  
)  1-800-736-4327, extension 203
2   1-800-328-0522
fraternalinsuranceapp@kirklin.com