Find peace of mind with management liability coverage from a company that’s rated “A+” (Superior) by AM Best.* Take a look at some recent claim examples. Remember, every claim is different and coverage may vary.
*Rating affirmed December 15, 2023
Nonprofit D&O Coverage: Claims Scenarios
A not-for-profit health and wellness organization’s former employee initiated a lawsuit against the organization and its executive director alleging violations of wage and hour laws, age discrimination, and wrongful termination. The parties engaged in settlement discussions shortly after suit was filed. The parties settled for a total of $105,000, of which $25,000 was allocated toward the alleged wage and hour violations and $80,000 was allocated toward the age discrimination and wrongful termination allegations. In addition, approximately $28,000 in defense costs were incurred.
The United States Department of Justice filed a lawsuit against a non-profit organization alleging violation of the False Claims Act. The lawsuit required the organization to compile and produce hundreds of thousands of documents to the government as part of the lawsuit. The organization incurred approximately $250,000 in defense costs before the government agreed to discuss settlement. The case ultimately settled for a total of $400,000.
A charitable non-profit organization applied for and received government funding. The government conducted an audit and determined that the government funds were not used for the purposes described in the funding application. The government commenced action seeking damages due to the alleged negligent misrepresentations in the application in violation of the False Claims Act. The claim was resolved by way of negotiated settlement. Costs incurred to defense the claim totaled approximately $300,000.
A local college received a letter from an attorney representing its former officer alleging she was wrongfully terminated from the organization, and that the organization and its board members have interfered with her ability to obtain future employment in the industry. The letter demands a total of $50,000 and threatens to file a lawsuit against the organization. The parties agreed to attend mediation before a lawsuit was filed, during which the parties agreed to settle the allegations for a total of $25,000. An additional $10,000 was incurred in defense costs.
The former treasurer of a chamber of commerce filed suit against the organization’s other board members alleging they made defamatory statements about the former treasurer regarding misappropriation of funds. The board members incurred approximately $50,000 in defense fees before the case was dismissed by the court.