I recently came across a news article on a California charter school where its founders are accused of misappropriating over $200,000 in school funds for their personal use.

Prosecutors allege the couple used school funds to buy groceries, clothes, and gift cards, while their attorney argues that the two acted in good faith.  

I wanted to point out this article because many school administrators (and school board members) don’t know about the insurance implications when an event like this happens.  

Depending upon how the lawsuit is filed and the allegations made, a charter school’s Director’s & Officer’s insurance policy will often at least defend the school and its board members against the claims made in claims like the one above. 

A D&O insurance policy will usually defend until it is determined the defendants knowingly committed an illegal act, the claim is denied, or until the completion of the trial.  Whether or not the policy will repay the amounts taken by the founders will depend upon various issues surrounding the claim and the policy it was written.

For full details on Directors & Officers Insurance and how it can help your school, please see the following blog post: What is D&O Insurance?