How to Protect Your Nonprofit's Directors and Officers From Legal Liability

ARTICLE | March 27, 2026

Serving on a nonprofit board is a meaningful commitment, but it comes with real legal exposure. Even well-intentioned directors and officers can find themselves personally liable if a disgruntled employee, donor, or other party decides to sue. Claims involving wrongful termination, discrimination, hiring decisions, or the alleged misuse of donor contributions are more common than many board members realize, and the cost of defending against them can be financially devastating for both the organization and the individuals named in the lawsuit. Directors and officers (D&O) insurance exists to address exactly this kind of risk, but understanding how it works, what it covers, and how costs are allocated between the organization and its board members is essential to making sure your coverage actually does its job.

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