The Council on Foundations is pleased to offer a 10 percent discount on directors and officers (D&O) liability insurance. D&O insurance provides financial protection for a foundation and its directors, officers, employees, and volunteers in the event of a lawsuit.

The policy is provided through Aon Association Services and underwritten by The Hartford.

Why get D&O insurance?

A foundation doesn’t have to be in the wrong to be sued. D&O insurance protects foundations by covering costs—defense, damages, or settlements— that result from addressing actual or alleged violations in court.

About 90 percent of D&O claims are employment-related issues—wrongful termination, harassment, discrimination. About 40 percent of these are straight termination cases.

Some features of The Hartford’s policy:

• $1,000,000 limit of liability (higher limits available for qualified foundations)
• employment practices liability coverage for alleged violations of civil rights, disabilities, age, and equal pay statutes and for alleged sexual harassment
• defense cost coverage for alleged violations of IRS tax code provisions, such as self-dealing or taxable expenditures
• protection for persons who serve on other nonprofit boards as part of their duties
• reimbursement for legal costs that does not decrease the amount available to satisfy any judgment against the foundation
• legal expenses paid directly by the carrier so that the insured party need not advance these funds
• coverage for claims relating to mismanagement of foundation assets

The Council does not believe that D&O insurance is right for every foundation.  Rather, we encourage you to decide, in consultation with your foundation’s legal counsel, if D&O insurance is the right choice for your foundation’s needs.

What does D&O insurance cost?

The Hartford is committed to offering D&O insurance to the foundation community at competitive rates. For foundations with $1 million or less in total assets, premiums begin at $400.

Who is eligible for D&O insurance through the Council’s program?

The Council offers the D&O program to all grantmakers as a service to the field. The Council does not receive a share of the premiums or any other form of remuneration in connection with the program.

Coverage is available in all states. Brokers can access the Council’s D&O program through Aon Association Services. 

Who is eligible for the discount?

This discount is available only to grantmakers with current membership in the Council or in one of the participating regional associations of grantmakers in states where the discount is approved.

To find out if your regional association participates, check with your regional association, Aon, or the Council.

The discount is still in the process of being approved by the insurance commission in the following states: Alaska, Louisana, New York, and Vermont.

How to get started

Download an application and other materials at Aon’s D&O website or call Jason Tharpe, program administrator at Aon, at 202-429-8561. To obtain the discount, let Aon know that you are a member of either the Council or a participating regional association.

If you have questions for the Council about the program, contact Maya Harris, staff attorney, at 703-879-0714 or maya.harris@cof.org.

Additional Reading

D&O Do’s and Don’ts: Making the most of your insurance coverage 
by Jane Nober, former special counsel to the Council on Foundations 
To apply or not to apply—that’s the first question many foundations face when considering D&O insurance. But the questions don’t stop there. What types of activities do you disclose in the application process? Do you have any arrangements that might be considered unusual? Once you’re covered, what will increase your liability exposure? When do you report a complaint or lawsuit? This legal brief puts D&O insurance in perspective, providing an introduction to how these policies work.

Directors & Officers Liability Insurance and Indemnification, Second Edition
by John A. Edie and Jane C. Nober
Written for nonlawyers, this booklet provides easy-to-understand descriptions of liability and D&O insurance. Its question-answer format offers answers to important questions such as: What are the real risks? How can these risks be minimized? What should one look for in a good D&O policy? How much coverage is needed?