Exempt - Winter 2008 - (Page 12)

INSURANCE Full Coverage BY TOM POPE How much D&O insurance is necessary? he South Florida Community Development Coalition’s Web Site asks: “How do we know if we’re paying too much for directors and ofﬁcers (D&O) insurance?” Besides helping developers build the hopes of obtaining housing, the Miamibased coalition informs grassroots nonprofits about options with D&O. The site mentions great variations exist among nonproﬁt D&O policies. “Step one is trying to ﬁnd a good agent to look at all the options,” said John Little, Webmaster for the site and senior attorney of the Legal Services of Greater Miami. “You hope your agent will work hard for you to get the best price.” Little’s site has been collecting material since 1996. He conducts board training and works to have small nonproﬁts follow corporate formalities. “This topic comes up when a board member is concerned if a lawyer ties the board member in a suit with the organization,” he said. Many board members fear the T insurance changes. He explained that insurance carriers have left Florida and have separated wind from other casualty coverage. “They ask, ‘is the same happening with D&O?,’” he said. “They don’t know if they’re getting ripped off or not.” The coalition recommends evaluating the D&O policy costs in relation to the policy’s coverage, limits and deductibles. Determine if you are paying too much by requesting quotations from different insurance companies. Consider obtaining competitive bids every three to ﬁve years. “I’ve never worked with an organization that had too much D&O,” said Melanie Lockwood Herman, executive director of the Nonproﬁt Risk Management Center (NPRMC) in Leesburg, Va. NPRMC is hired to review insurance coverage as one of the organization’s tasks. “Usually they decide they don’t have all of the coverage they need,” she said. How do we estimate what is needed? Often the question is whether the esticontinued on page 14 12 | Exempt | Winter 2008

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Exempt - Winter 2008

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