"D & O policies can take different forms, depending on the nature of the organization and the risks it faces, so it's best to seek out an insurance company with deep experience in this specialized field. The policies

It is a misnomer to believe that only large non-profit organizations need Directors' & Officers (D&O) insurance. Directors and officers of every-sized non-profit organization have meaningful exposure to personal liability. The liability for directors and officers of small corporations is at least as high as that of for-profit corporations. Large numbers of directors and officers for non-profit organizations lack experience. Often times, they may also lack sufficient knowledge of their legal duties and responsibilities regarding the non-profit they serve. Directors and officers of non-profit organizations who do have knowledge or experience sometimes take advantage of the less formal approach of non-profits and fail to take the same business approaches to decision-making as they would when working for a for-profit corporation. Non-profit boards that fail to protect their organizations with a D&O insurance policy may find that the cost of just one claim is far larger than the cost of any insurance premiums they would have paid, if they had purchased a D&O insurance policy. In the context of various shareholder disputes, the liabilities under the Companies Act, 2013 (the Act) could also increase pressure on defaulting directors, nominating shareholders, or promoters. In addition, while resignation may protect a director from subsequent defaults, an erstwhile director may still continue to be liable for any defaults that took place during his or her tenure. The penal provisions of the Act may be cause of concern about the role, accountability, and responsibility of non-executive, nominee, and independent directors, who could be caught on the wrong side of the company's disputes. D&O liability insurance applies to anyone who serves as a director or an officer of a for-profit business or non-profit organization. A directors and officers liability policy insures against personal losses, and it can also help reimburse a business or non-profit for the legal fees or other costs incurred in defending such individuals against a lawsuit. D&O insurance will not prevent claims from occurring; however, it does mitigate the high costs associated with defending claims. Lawsuits and potential claims may originate with vendors, donors, competitors, employees, government, regulators or others. Hence, regardless of the organization's size and board experience, all non-profit organizations need to purchase D&O insurance protection.