Directors and Officers Liability

The PLIT-sponsored professional liability insurance policy provides coverage for the board decisions you make as a veterinarian such as standard setting, peer evaluation and certification activities. However, the policy does not afford coverage for administrative responsibilities or employment-related decisions. A directors and officers (D&O) liability insurance policy (also referred to as association professional liability) is designed to cover these exposures. Furthermore, a D&O policy insures the organization itself and all past, present, and future officers, directors, board and committee members, volunteers and employees of the organization. Veterinary professional and directors and officers liability policies are needed to provide adequate coverage for members who sit on a board for an association, emergency clinic, or other type of non-profit veterinary organization.
 
Just like practicing veterinarians, state associations and specialty organizations are at risk from allegations of misconduct. How would you respond to a lawsuit alleging the board or staff was negligent, stifled competition, or discriminated against current or prospective employees? Are you prepared?

Consider the following activities:

  • Participating in legislation and public health issues
  • Continuing education offerings
  • Referring members to endorsed resources, especially where there may be a financial relationship between the association and vendor
  • Collecting and spending membership dues
  • Publishing newsletters, websites, resource materials, or other content
  • Hiring, firing and disciplining employees.

These are typical duties performed by an association. Lawsuits can occur from allegations such as negligent decision-making, misappropriation of funds, inaccurate or incomplete disclosure, discrimination, and wrongful termination. Clients, members, the public, competitors or employees can make claims. If the association is not adequately insured and a judgment is rendered, the courts can turn to the personal assets of board members. And remember, board members are not covered by veterinary malpractice or homeowners insurance for this exposure. Therefore, it is imperative for the organization to carry directors and officers (D&O) liability insurance (also referred to as association professional liability) to protect the assets of the association as well as the personal assets of the directors and officers.