From Nonprofit Quarterly – A Reminder to Check Your Nonprofit’s Liability Coverage

Nonprofits in the News

Nonprofit Quarterly has an item dated August 1, 2012 alerting nonprofits to review their liability insurance policies. Rick Cohen, national correspondent to NQ, writes about two nonprofits that may face possible legal action without the benefit of liability coverage. In one case, the organization may not have liability insurance protection. In the other, the insurer of a large nonprofit—Penn State—may refuse to pay:

School officials have said that Penn State’s general liability and officers-and-directors liability insurance policies will cover all anticipated costs from litigation, so that donors, students, and taxpayers won’t be footing the bill for the blowback from the Sandusky convictions involving incidents that occurred on Penn State property or allegations of cover-ups by Penn State officials. However, reports are that the insurers don’t agree. The Pennsylvania Manufacturers’ Association Insurance Company, which has covered Penn State for decades, has told the Philadelphia Inquirer that it doesn’t intend to pay for Penn State’s costs in expected victims’ lawsuits, citing limitations and exclusions in its policies concerning claims of “bodily injury and mental anguish,” “intentional acts,” and charging that school administrators covered up their knowledge of Sandusky’s criminal acts, which the insurance company argues is another reason it should not have to pay.

Go here to read Cohen’s article: Sci-fi Convention, Penn State Serve as Liability Reminders – NPQ – Nonprofit Quarterly – Promoting an active and engaged democracy.

10-minute Board Discussion:

Under what circumstances would our D&O or general liability insurance not provide coverage?


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