The board of a charitable organization must be certain that the organization is organized and has a good system to protect their assets. Such assets include property, financial, human resources, programmatic content, material, integrity and their reputation. These all must be protected from loss or damage. Thus, the board should be regularly reviewing the organization’s need for general liability and liability insurance for their directors and officers.
CORE CONCEPTS
-The board manages the organizational assets.
-Every organization should have adequate risk management.
-Risk can be either assumed, eliminated, protected, or even delegated.
-The board, the organization, and those associated with the organization all need to be covered with liability protection.
LEGAL AND COMPLIANCE ISSUES
-The board is responsible for watching the activities of the organization.
-Each board member has duties of overseeing the organization and each board member can be liable for breaching their personal duties.
-Under Federal and state volunteer immunity laws give broad liability protection for volunteers and uncompensated board members for them to act within their scope of practice. But it does not prevent lawsuits.
-The Insurance for the Director’s and the Officer’s can provide coverage for both liability expenses and defense costs.