Board Insurance

Check your state laws for whether Board members are protected or not. Montana statutes cover a Board member's liability so most of the Boards I know about don't buy extra coverage.

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Ginny Cass Member, Board of Directors of four nonprofits at present, and formerly on the Board of several others

John -

At the very least you board has to be indemnified. At best, it will purchase Officers and Directors insurance. Contact me off line for more details.

Mac West Informal Science, Inc.

Hi all. Several members of the Board of Directors of the museum at which I work are interested in Board Insurance. There seems to be some confusion on their part, however, about just what Board Insurance is and does. Several members are confusing Board Insurance with General Liability Insurance, which the museum already has. One member informed me that he wants Board Insurance, he doesn't care what it does, because he is a member of other Boards and those other Boards have it. I have contacted several insurance brokers, all of whom think Board Insurance for a small not-for-profit organization is essential. And of course, they just happen to sell Board Insurance! Several colleagues at local not-for-profits work for organizations that have decided against carrying Board Insurance. Anyone out there have any experience or knowledge about this kind of insurance, or with involving Board Members in a realistic and practical evaluation of the issue? All responses most welcome.

John Eilertsen, Executive Director Hallockville Museum Farm & Folklife Center

I would like details about this too. Thank you.

Regards Mary Haegele

On 17 Apr 98, the dancing digits of Rmacwest delivered:

Mary -

Please tell me a bit about what you need and what your place is. Is it the difference between indeminification and D&O? Something more?

If your state has an organization such as: '

As the recently resigned executive director of the Museum Trustee Association (MTA), a national nonprofit representing over 7,200 museum trustees in institutions throughout the US, I strongly recommend that nonprofit boards have adequate Directors and Officers (D&O) Liability Insurance in place. There are a number of good policy writers out there. The general insurance policy your museum has in place may have such a rider available, but as you've found out, there are countless others out there. You may wish to contact the MTA and inquire about D&O options. They can put you in touch with a national firm they have worked with that pools small groups like yours so that they have access to lower rates. The MTA's national offices are in Washington, DC. The number is (202) 857-1180. Good luck in what ever option you pursue.

Phyllis Doak

I missed the original posting but have the gist of the subject from the many responses, and have one comment to make.

Just put yourself in the shoes of a person asked to join the board of a non-profit museum. It will invariably involve spending time and money in support of the effort for which the reward is knowing you are doing something for your community. Then, if you are told the museum has no liability insurance and that you might become involved in a law suit against the museum (for whatever reason) thus exposing your personal assets, would you still join? Only a person without a house or assets would expose himself and his family to the risk, no matter how unlikely the risk might be.

John Bing

Laguna Beach, CA