Non-Profit Claim Examples

Non Profit Directors & Officers The trustees of a trade association decided to expand their activities into areas that were not explicitly envisioned by the founders. Their state’s attorney general brought an action against them alleging misuse of funds and property for operating outside their charter, even though no third party raised a complaint.

A local chamber of commerce published a quarterly newsletter. The newsletter included a tourism section, promoting places of interest, attractions, restaurants, etc. A new restaurant had recently approached the chamber with a request to advertise in the upcoming issue  The chamber agreed and accepted a minimal advertising fee from the restaurant. Upon release of the next issue it was discovered that the Executive Director never expedited the restaurant request and actually kept the money. The restaurant in turn sued the chamber for breach of fiduciary duty, breach of contract and interference with economic interests.

A donor made a large contribution to a foundation to aid students in need of tuition.  The board instead voted to expand their headquarters and commit a portion of the donation to the building fund. The donor filed suit, alleging misappropriation of funds.  Damages included return of the full contribution plus interest.  As some of the money was

already spent, the foundation was financially unable to return the entire donation.

Employment Practices Liability A chamber of commerce advertised an open position for a secretary. The organization received seven applications. Only one applicant was a male who was 57. He was not interviewed.  He alleged he was not interviewed because of his age and filed suit against the organization for age discrimination.

Professional Liability The insured is a Family and Crisis Counseling operation. The family is directed by the court to seek family counseling at this facility.  There is an abusive father in the family.  The mother is trying to get a restraining order regarding child visitation rights for the father as a result of past mistreatment. The counselor at the facility is asked to make a recommendation. The counselor disagrees with the mother’s opinion and makes a recommendation to the court that the father be allowed to continue unsupervised visitation. The father physically abuses one of the children causing bodily injury. The mother sues the facility based on counselor’s recommendation.

The parents of a troubled teenager take their child to a counseling facility for help with depression. The counselor after talking at length with the teenager shrugs this off as “typical teenage behavior”, sends the teenager home and schedules a follow-up visit.  Unfortunately, the follow-up visit never occurs as the child commits suicide later that week. The parents file a suit against the counselor as they feel this would not have happened had the counselor recognized the signs and referred their child to the proper facility.

A drug addict reveals to his counselor that he is HIV positive.  The counselor refers his client to a clinic to address his medical condition.  The clinic requests a copy of the client’s file. The counseling facility releases the information without obtaining a SIGNED RELEASE FORM. The client sues the facilities for breach of the “privacy act”.

Abuse & Molestation

A 14-year-old girl comes to a facility and does not like her counselor. The girl states the counselor improperly touched her in order to avoid future visits. The parents sue the facility.

Special Events

A guest at a beer garden event off-premises of the sponsoring chamber of commerce is struck on the head with a beer can thrown by a bartender and files a claim due to bodily injury.

Tent at a designated fundraiser was not anchored properly. The tent blew over and damaged multiple parked cars. The car owners sued for repairs.

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