Filed Under:Markets, Commercial Lines

The Line on Pricing

D&O coverage is typically sold in a bundled package with Employment Practices Liability insurance. Limits, which can be shared or segregated, vary by size of the nonprofit, but are usually $1 million, $3 million or $5 million, says Sal Pollaro, managing director for Markel Corp. Limits can reach into the tens of millions of dollars for the larger nonprofits.

Coverage is on a claims-made basis. A departed board member remains covered so long as the nonprofit’s D&O coverage stays active.

Deductibles begin at $500, says William R. Henry Jr., executive director of Volunteers Insurance Service Association Inc. The number of people associated with the organization drives the premium.

Recently, the D&O line has seen “many more market entrants,” says Tom Marchetti, vice president at specialty-insurance broker and management-consulting firm Ames & Gough. A decade ago there might have been just four or five main specialty insurers in the space.

“This increase in competition is driving price and coverage terms,” says Marchetti. Self-insurance is also an option for the larger nonprofits, he adds.

Henry says nonprofit D&O is less expensive than D&O insurance for a for-profit organization and is worth getting, since coverage for wrongful acts is not provided by a Commercial General Liability policy—which only covers bodily injury and property damage.

Henry says nonprofit D&O is less expensive than what for-profit organizations pay. But “expensive” is relative. Scott Simmonds, a business-insurance consultant, tells clients the “price of admission is at least $750”—a nominal amount for a for-profit concern. “But that can be the annual budget of a small nonprofit,” he adds.

Top Story

The 10 most dangerous U.S. cities for winter weather driving

Not all roads, or drivers, are created equal.

More Resources

Comments

eNewsletter Sign Up

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Mobile Phone
         

Advertisement. Closing in 15 seconds.