How D&O Insurance Protects Your Faith-Based Organization
Lawsuits can happen as a result of decisions made by the board of directors of a faith-based organization. Directors and Officers (D&O) insurance protects your place of worship’s board of directors financially against claims of negligence.
Without the protection of D&O insurance, the financial impact of a lawsuit could be devastating to your church, synagogue, mosque, temple, or other place of worship.
What is directors and officers insurance for faith-based organizations?
Every faith-based organization should have D&O insurance.
D&O insurance protects board directors, officers, trustees, employees, volunteers, and ministry personnel for their personal liability stemming from actual or alleged breach of duty, errors, or misstatements in their responsibilities.
Examples include liability related to wrongful dismissal, employment practices, contractual obligations, and the general safety and well-being of faith-based employees and members.
Even if a third-party claim is unfounded, legal costs still can be substantial for your faith-based organization. D&O insurance can help cover these costs.
Who does it protect?
D&O insurance protects pastors, administrators, elders, trustees, deacons, board members, directors and officers, and their spouses.
What does D&O cover?
- Pays legal costs to defend your faith-based organization and its leaders. For example, it would cover claims of mismanagement of funds and failing to perform required duties.
- Covers financial damages your ministry or its leaders must pay due to wrongful leadership activities on behalf of your place of worship.
- Provides protection for situations typically not covered by commercial general liability (CGL) insurance.
- Covers misleading statements, reporting issues, inaccurate disclosure
- Negligent acts and allegations of misrepresentation
- Decisions that result in adverse financial consequences
- Wrongful dismissal and employee discrimination claims
- Failure to adhere to federal and provincial laws and regulations
My church is non-profit so should it have D&O coverage?
In Canada, churches are generally treated as non-profit organizations and many qualify as registered charities. That does not mean your faith-based organization shouldn’t have directors and officers insurance.
Having D&O insurance ensures that the board, board member or officer is protected from paying legal expenses should a claim be made. It can protect your church from defamation made by an officer or board member.
How much is D&O coverage for faith-based organizations?
Faith-based organizations have different needs and provide different services. There isn’t one set price for D&O insurance for your place of worship.
Ask your Western Financial Group business insurance expert to help you get the right faith-based coverage at the right value to protect your church, synagogue, mosque, temple, or other place of worship.
