If you sit on the board of a non-profit daycare in Ontario, this article is written for you. If you run a non-profit centre and report to a board, it is written for you too.
Because there is a coverage gap that shows up in almost every non-profit daycare policy I review. It is called Directors and Officers liability, and it is missing from the majority of boards I encounter.
What D and O Actually Covers
D&O responds when the board or an individual director gets sued for a governance decision. It is separate from CGL (which covers third-party injury) and separate from professional liability (which covers educational and supervisory errors).
Governance Decision Claims
A parent alleges the board mismanaged CWELCC funding or breached fiduciary duty.
Employment Matters
Wrongful dismissal of an ECE, human rights complaints, workplace investigations.
Oversight Failures
Allegations the board failed to supervise the Executive Director.
Regulatory Investigation
Ministry investigations where individual directors need personal defence counsel.
Why Board Members Are Personally Exposed
CGL covers the entity, not individual directors. Corporate protections for non-profit directors exist but are weaker than for paid directors of for-profit corporations. Indemnification can be limited, is subject to insolvency risk, and often excludes specific claim categories.
What the Right Policy Looks Like
For most Ontario non-profit centres, $1M to $2M limits. A few hundred to a few thousand dollars annually. Look for full ABC structure, employment practices liability endorsement, regulatory investigation coverage, and prior acts coverage with a nailed-down retroactive date.
Final CTA
Chapter 6 of my new playbook is entirely on this. Download the playbook or book a 20-minute board session.
