D&O policies are purchased in order to protect both the organization and its directors and officers. Many of these policies offer only limited protection for the organization. But if they are selected carefully, they can supplement the indemnification protection appearing in the nonprofit's articles of incorporation.

Derivative actions:

If an action is brought against a board member on behalf of the organization itself, as opposed to a third party action, (see third party liability of board members), this is referred to as a derivative action. Although rare, derivative actions occur when a lawsuit is brought against a board member by the State Attorney General, another board member, or other members of the nonprofit organization.

Endorsement (Insurance):

Endorsements are modifications of an existing insurance contract or policy. A nonprofit organization may have to add these provisions or modifications to an existing policy to ensure the coverage is tailored to meet peculiar circumstances or needs.