We all like to give back to others, and many choose to do so by serving on a non-profit organization’s board of directors. Did you know, however, that in Canada claims against management are on the rise and that their importance is ever increasing? Assurances Multi‑Risques would like to alert you to this fact and encourage organizations and businesses to make sure that their officers’ and directors’ personal assets are well protected. Lawsuits are always a risk for businesses and organizations. That’s why we recommend that you contact a broker specialized in directors and officers third party liability insurance.
Why subscribe to third party liability insurance?
As an administrator, you could be sued because of a decision you or your board of administration has made, or following what is thought to be a wrongful employee dismissal. Since you have a duty to exercise due care, any failure on the part of the business, organization or yourself can result in a business or personal lawsuit.
More information concerning directors and officers insurance policies
Many insurers offer this type of insurance coverage. Here is a summary of the coverage offered by this type of insurance:
- Forgotten business or organization government source deductions;
- A shareholder has paid himself a dividend in a company whose financial status is uncertain. Unhappy with the situation, the other shareholders decide to indict the shareholder for financial mismanagement in order to recover the dividend;
- Conflicts between administrators;
- Failure to disclose information or lack of transparency on the part of an organization;
- Financial mismanagement;
- Wrongful dismissal (be warned that some insurers will require a special clause to cover this type of claim).
Whatever the size of your business, lawsuits are always a possibility. That’s why we recommend that you contact a specialized directors and officers insurance broker. Make sure that your personal assets and your business’ assets are well protected.