As part of a generous grant from the Open Society Foundations, INN has received $100,000 over two years to help nonprofit newsrooms secure necessary insurance to safeguard their mission-driven news organizations.
This past week, I had the pleasure of writing checks for more than $14,000 to five INN members, so that they could purchase — for the first time — Errors & Omissions (E&O) and/or Directors & Officers (D&O) insurance. While I am thrilled that INN can help these five organizations, I have to wonder if there are other members in the network who are underinsured, or who are still open to malicious legal attacks.
E&O and D&O insurance are as important to nonprofit newsrooms as your health insurance is to you and your family. Going without means risking everything in the event something unexpected happens. Lawsuits will happen in investigative journalism, regardless of how baseless the claims may be, according to Investopedia. Even if a case is eventually found in favor of a nonprofit publisher, the legal fees can be exorbitant, and can be crippling to your organization.
Investopedia defines E&O insurance as “a professional liability insurance that protects companies and individuals against claims made by clients for inadequate work or negligent actions. Errors and omissions insurance often covers both court costs and any settlements up to the amount specified on the insurance contract.”
D&O insurance is a very different product, and is designed to provide necessary coverage to your officers and board who are assuming personal liabilities to serve your organization.
According to the American Bar Association: “Officers and directors of nonprofit boards, like officers and directors of for-profit companies, have fiduciary responsibilities. These responsibilities include the duty of care and the duty of loyalty. Board members of nonprofit institutions may have special fiduciary duties to advance the charitable goals of the institutions and protect their assets. Allegations of wrongful or tortious conduct may require officers and directors to defend themselves from such claims, and to face substantial liability exposure.”
But how much insurance is enough?
Last week, I had the pleasure of serving on a panel at the 26th Annual Media and the Law Seminar held by the University of Kansas Continuing Education Program. The panel was focused on the insurance implications of editorial collaborations. Larger nonprofit news organizations often carry up to $5 million in insurance overall, and then will get additional insurance of up to $1 million for certain projects such as documentaries. Smaller organizations are generally encouraged to have no less than $1 million in E&O coverage. The cost of these policies can run from the low thousands to the tens of thousands annually as a result.
Although I am neither an insurance broker nor an attorney, I have gained some insights into the insurance procurement process through the course of putting together the preferred-insurance program for INN members:
- It pays to shop around. Just because INN has a relationship with a particular broker and insurance provider doesn’t mean we have the guaranteed best prices.
- Not all insurance policies are written the same. Having a trusted broker or attorney read the policy and make sure that you are adequately covered is well worth it.
- Request to pick your own defense attorney in the event of a case. Insurance companies are focused on managing risk — yours and theirs. They may be more motivated to cut losses and settle than taking on the costs of seeing it through the legal process. If possible, being able to pick your own defense attorney will help you safeguard your organization.
INN hopes that through these programs, including our preferred insurance program, our insurance subsidy program and our pro-bono legal assistance program, that each and every one of our member organizations will be able to secure adequate insurance.
Members who would like to apply for an insurance subsidy for their organization must complete the application form and secure a quote for qualifying insurance (E&O and/or D&O) from a broker of their choice.
Please note: The purpose of the grant is focused on helping organizations who have previously been unable to secure adequate insurance. Therefore, preference for new policies or increases in insured amounts to existing policies will be given over requests to subsidize existing policies for all applications.