Directors and Officers Liability

Directors and officers coverage protects individuals who govern the organization, and in most forms the organization itself, against claims alleging mismanagement rather than bodily injury. In senior care it matters most for nonprofit and CCRC boards, and for any operator with outside investors, a lender, or bondholders.

The nonprofit senior living board is the classic exposure. Volunteer trustees, often community members, govern an entity holding substantial resident entrance fees and real estate debt, and a financial deterioration produces claims from residents, families, bondholders, and regulators simultaneously. For a CCRC or life plan community the exposure is sharper still, because residents have paid large refundable entrance fees and have standing to sue over how those funds were managed. Check three things: whether the entity itself is covered or only individuals, whether there is a carve-back preserving coverage for innocent directors when one is accused of fraud, and how the bodily injury exclusion is drafted, since an overly broad one can pull ordinary governance claims out of coverage merely because a resident was injured somewhere in the story.