Q: Why do I need Liability Insurance?
A: Liability may be defined as “any legally enforceable obligation”. Any time we operate an organization of any sort, we subject ourselves to some form of liability. There are many types of liability insurance policies available. These include general liability, professional liability, directors and officers’ liability and automobile liability.

Q: Why do we need Directors’ and Officers’ liability insurance?
A: Anyone who serves as a member of a Board of Directors for a nonprofit organization can be sued for making a decision or failing to make a decision as a member of the Board. Although Federal and State legislation is in place to protect board members against settlements, a board member may be sued. The policy will provide a defense against lawsuits presented even though no payments may be made to a third party.

Q: Does my organization need to purchase Employment Practices Liability?
A: This coverage is included in a nonprofit directors’ and officers’ liability policy. It is designed to protect against claims presented by an employee. However, the policy does not cover criminal acts by a board member or an employee.

Q: What is Alliance of Nonprofits for Insurance, Risk Retention Group?
A: ANI-RRG is an insurance company domiciled in Vermont. It is a member-owned nonprofit public benefit corporation that serves 501(c)(3) tax-exempt nonprofit organizations by providing a stable source of reasonably priced liability insurance.