Literacy Basics - Community Literacy of Ontario

Insurance

Liability insurance for boards is known as Director's and Officer's (D & O) Insurance. This insurance covers the legal costs that an organization is responsible for if liabilities have occurred. While the Canada Corporations Act does not state that boards and their members must have insurance, some funders require it before granting money to organizations, and some organizations have this written into their bylaws and policies as a requirement.

In organizations where D & O insurance is not purchased, individual members may want to look into purchasing it for themselves. The amount of coverage on a policy and the cost of premiums may vary depending on the activity of the organization, but it is generally recommended that organizations be covered for no less than $2 million.

The cost of D & O insurance can sometimes be a financial burden to organizations. It is a cost, however, that should be a priority, and organizations are encouraged to shop around for quotes and even look into becoming members of affiliations or provincial organizations that offer insurance as one of its benefits.  A document called Directors' and Officers' Liability Insurance:  An Overview provides further insight into the issue of insurance.

Designed and hosted by in collaboration with CLO