aon association services association business insurance solutions directors’ & officers’...

Aon Association Services

Association Business Insurance Solutions

Directors’ & Officers’ (D&O) Insurance:

What you need to know.

September 5, 2012

Presented by Josh Srnka

Association Business Insurance SolutionsDisclaimer

• This presentation is not meant to suggest that any insurance policy issued by any organization represented today would provide coverage for any specific claim. Coverage for any particular claim depends on the circumstances of the claim and the language of the relevant policy.

• Any name or image that bears any resemblance to any person, real or fictional, is purely coincidental.

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• Responsibilities / Basic Duties

• Management Liability Insurance

• What is D&O Insurance?

• Who’s Covered?

• What’s Covered?

• Common D&O Claims

• Mitigating Risk

• Q&A

Agenda

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• Nonprofit organizations should be operated and managed with at least the same degree of care as for-profit corporations.

• Directors and Officers are subject to three basic duties in executing their obligations:

1. Duty of Care – act prudently 2. Duty of Loyalty – act in the best interest of the organization3. Duty of Obedience – adhere to the organization’s bylaws

Responsibilities / Basic Duties


• Directors and Officers (D&O) Liability Insurance

• Employment Practices Liability Insurance (EPLI)

• Professional Liability Insurance – Errors & Omissions (E&O) Coverage

• Fiduciary Liability and/or Employee Benefits Liability

• Crime and/or Fidelity Coverage

Management Liability Insurance

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• Protects an association against allegations of mismanagement, neglect or breach of duty as it relates to the management of the organization.

• A crucial component of Nonprofit D&O insurance is the protection for the association against employee related allegations – including allegations of discrimination, wrongful termination and sexual harassment, as well as failure to hire or promote.

What is D&O Insurance?

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The D&O insurance policy Definition of Insured usually includes….The Entity, as well as past, present & future Directors, Officers, Committee Members, Trustees, Employees & Volunteers. The heirs, executors, administrators and legal representatives of an Insured, in the event of an Insured’s death, insolvency or bankruptcy.

Who is covered?

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Coverage typically Includes:• Employment Practices Liability Insurance (EPLI)

o Discrimination (Race, Gender & Age)o Wrongful Terminationo Harassment

• Personal Injury (Libel, Slander & Defamation of Character)• Publisher’s Liability (Copyright or Trademark Infringement)• Mismanagement of the association’s funds

What is covered?

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• Employee / Employer Disputeso Discriminationo Wrongful Terminationo Sexual Harassmento Failure to Hire or Promote

• Alleged Anti-Trust Violations

• Membership Disputes

• Standard Setting, Certification, and Peer Review

• Defamation

Common D&O Claims

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• Remember the three duties (care, loyalty & obedience)

• Document, document, document

• Legal counsel

• EPLI Website

• Does it sound right / Cooling off period

Mitigating D&O Risk

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Questions??

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Josh Srnka

Account Executive

Aon Association Services

1120 20th Street, NW, 6th Floor

Washington DC, 20036

Phone: 202.429.8543

Email: [email protected]

Website: asae-aon.com

Contact Information

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aon association services association business insurance solutions directors’ & officers’...

Documents

duties care

duty of care act

duty of loyalty act

employee related allegations

allegations of discrimination

allegations of mismanagement

degree of care

breach of duty