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Does a non-profit organization need Directors and Officers coverage?

Nov 25, 2019

Texas has a Charitable Immunity Law that addresses Bodily Injury and Property Damage. However, it does not limit the duties or liabilities of a member of the board to the organization or its members and shareholders, and it does not apply to instances involving willful or intentional negligence.

Board members can be sued for various policies they enact or allegations of discrimination or financial mismanagement or failure to use “reasonable deliberation” when setting policies. Many lawsuits against directors allege willful negligence and a host of other issues unrelated to “bodily injury” or “property damage.” This is why most non-profits continue to carry D&O coverage and why many attorneys recommend to their personal clients that they not serve on boards that don’t have the coverage.

To see how the law impacts employees and volunteers click here.

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