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DIRECTORS AND OFFICERS OF NONPROFITS SHOW GREATER CONCERN FOR LIABILITY INSURANCE; EMPLOYEES FILING MOST COMPLAINTS, WYATT STUDY FINDS

DIRECTORS AND OFFICERS OF NONPROFITS SHOW GREATER CONCERN FOR LIABILITY
 INSURANCE; EMPLOYEES FILING MOST COMPLAINTS, WYATT STUDY FINDS
 CHICAGO, July 7 /PRNewswire/ -- Serving on the board of a nonprofit organization does not exempt directors and officers from liability suits. Recognizing this, many nonprofits have opted to protect themselves by purchasing directors and officers (D&O) liability insurance. In fact, Wyatt's new Directors and Officers Liability Survey for Nonprofit Organizations reveals that 85 percent of surveyed nonprofit organizations compared to 80 percent of for-profit corporations reported having D&O insurance.
 It's a common misconception that directors and officers serving on the board of a nonprofit organization are immune from liability suits, according to Phil Norton, risk management consultant in Wyatt's Chicago office. "The combination of personal exposure for the directors and officers plus the inability of many nonprofits to pay for these rare but potentially very large claims has made D&O insurance increasingly popular for nonprofit organizations."
 Hospitals and private schools reported the greatest percentage of D&O liability coverage for their directors and officers with 87 and 90 percent. Seventy-nine percent of surveyed public school directors and officers are covered by liability insurance and 73 percent of other nonprofit organizations, which include associations, purchase D&O liability insurance.
 More than three-quarters of the complaints filed against a nonprofit organization are filed by employees or by a physician working at a particular hospital. The number one complaint among employees is wrongful termination. This year one-third of the hospital employee complaints were wrongful termination, up from 25 percent in 1990. Discrimination, breach of employment contract, and harassment are other complaints filed by employees against their organization.
 "There are certain state laws that are designed to protect nonprofit directors and officers, but have no bearing on discrimination suits and other 'federal' cases," explained Norton. "As a result, more organizations are protecting their directors and officers with liability insurance."
 Wyatt's 1991 Nonprofit D&O Survey covers 803 participants including hospitals, colleges and universities, associations, and other nonprofits. While the median asset size was approximately $50 million, nonprofit respondents had assets ranging from less than $10 million to more than $1 billion.
 The 1991 Wyatt Directors and Officers Liability Nonprofit Survey can be ordered by calling Wyatt at 312-704-2719, or by sending a check for $200 to The Wyatt Company, D&O Services, 303 West Madison Street, Suite 2400, Chicago, IL 60606.
 The Wyatt Company is an international consulting firm specializing in the areas of human resources, financial management, and systems with 3,600 employees in 70 cities.
 -0- 7/7/92
 /CONTACT: Peter Miller, 612-921-8737 or Liz Leffel, 612-921-8723, both of The Wyatt Company/ CO: The Wyatt Company ST: Minnesota, Illinois IN: SU:


DS -- MN001 -- 6919 07/07/92 10:23 EDT
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Date:Jul 7, 1992
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