5 trends you need to know

December 8, 2014       The NonProfit Times      

Managers in any setting have always had some need to provide nurturing, guidance, supervision, all in a variety of ways.

Those ways are changing, as the workplace becomes more complex, and as the nonprofit sector becomes more complex.

During the 2014 Nonprofit Risk Summit, John Ergastolo of Arthur J. Gallagher & Co., outlined the trends that are having an effect in the workplace, especially in regard to management, what is often referred to as Directors and Officers (D&O).

Ergastolo said the obligations of D&O can be remembered in 3-D: The Duty of Care (it must involve sound and informed decisions), the Duty of Loyalty (the interests of the nonprofit are first), the Duty of Obedience (comply with laws and adhere to the mission of the organization).

Regardless, nonprofit organizations, and their D&O insurance carriers are seeing certain trends:

  • Nonprofits are getting more claims, and the number of D&O claims is rising. According to the Towers Watson D&O Survey from 2013, 63 percent of nonprofit entities have been subject to a D&O claim in the past 10 years.
  • The severity of nonprofit D&O claims is up (average claims for a nonprofit are estimated at $250,000).
  • Nonprofit D&O claims are no longer only Employment Practices Liability Insurance (EPLI) claims.
  • Regulatory actions against nonprofits are on the rise.
  • Many nonprofits are larger and more complex than ever.
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