Key Features in D&O Liability Insurance

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Nonprofit organizations are in jeopardy when attempting to exist without Directors and Officers Liability insurance. Liabilities, which are best defined as obligations that legally bind an individual or organization to settle a debt or to settle a wrongful act they may have committed, need to be anticipated and accounted for.

Given that you have taken the responsibility to acquire Directors and Officers Liability insurance, what happens when a claim is filed. Depending on the event, it would be covered either under the claims made form or under the occurrence form. The event that triggers coverage under either form is known as the "coverage trigger". If the determination of coverage comes under an occurrence trigger, the policy in force on the date of the event causing the loss must respond with both the defense and indemnity. Occurrence policies do not provide coverage for prior acts. However, they remain available for claims that arise years after they have expired.

If the determination of coverage comes under a claims made trigger, the policy may reach backwards in time and provide coverage for claims made today from negligent acts or errors and omissions that occurred before the policy was purchased. In that this form covers prior acts, a good faith statement (or either a certification of warranty) that the organization had no knowledge of the mistake, error, or controversy on the date that the coverage was purchased, is a necessity.

The best type of insurance coverage for board members would be coverage which includes both forms and therefore both triggers. 

It is a must for board members to get expert consultation regarding these key features before making a purchase.

If you have any questions, contact me for a free consultation.

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End of the CLASS Act and the Rise of Long Term Care Insurance

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The CLASS act (Community Living Assistance Services and Support) was another poorly designed and grossly inadequate government program. As a part of the Health Care Reform Act, it was to pay you a paltry lifetime benefit of about $50 per day when you became elderly or disabled and needed long term care. But, to receive this benefit in the future, it would have been necessary for you to voluntarily allow your employer take an undetermined amount out of your regular paycheck along with the Social Security, Medicare, and Income taxes that's already being withheld. It is good that the CLASS act no longer exist. May it rest in peace.

Still, with the elderly being the most rapidly growing segment of our population, it once again elevates the need for Long Term Care insurance (LTCi). This type of insurance begins when your doctor certifies that you are unable to perform at least two of the six activities of daily living without assistance and that this disability is expected to last at least 90 days. These activities include:

• Eating
• Toileting
• Transferring
• Bathing
• Dressing
• Continence

For you and your family, the amount of benefits per day, the waiting period, and the length of the benefits becomes essential information. As an example, you can choose a daily benefit of $200 per day, a waiting period of 60 days, and benefits to last for a lifetime. The age in which you apply, your state of health, and the above essentially determine the premium that you will have to pay.

Although the cost of long-term care may vary from state to state, across the country the cost of long term care, specifically assisted living and nursing home care, can easily exceed $50,000 a year. Recently in Illinois, an Assisted Living Facility (private, one bedroom) costs $41,880 and Nursing Home Care (private room) $63,875 or a (semi-private room) $54,750. Check out these costs in your state.

It is clear this that for most families it would be financially devastating to have to personally pay the cost of a family member's long term care in one of these types of facilities. The family may try to care for the beloved member at home, but often, for variety of reasons, it just can't be done.

The end of the CLASS Act once again leaves LTCi as the only way to get the benefits you need if you become elderly and disabled or just disabled. As a conscientious family member, you do not want to become a burden on other family members when it can be prevented. After all fitting it into a financial plan may just require some forethought and sincerity.

Get Down Payment Assistance to Buy Your New Home

Even in this economic climate, down payment assistance remains available. With the mortgage interest rate continuing to be historically low and the prices of homes 30% to 40% lower than just a few years ago, its time to buy your new home.

Almost every state has a home finance agency that offers down payment assistance. Its up to you to explore what the criteria are for becoming eligible and to meet the requirements.

If you live outside of Illinois go to the State Mortgage Finance Agencies to find out what's available in your state. If you live in Illinois, go to the Illinois Housing Authority for assistance 

In addition, here are some more sites that offer a variety of housing assistance in Illinois, New Smart Move, METEC Partners , North Shore Trust, and the Greater Chicago Housing and Community Development Organization.

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