We are featuring another guest blogger, Kenneth Huff.  Kenneth is the President of The Association of Presidential Awardees in Science Teaching (an NSTA Associated Group) and he recently investigated the benefits of Directors and Officer insurance and the protection it can provide for APAST.
With many associations continuing to experience the affects of a tenuous economy evidenced by declining memberships and decreased revenues, why then are some associations pondering adding another disbursement to their ledger?  Especially when it comes to purchasing insurance. As an officer or board member in your association, perhaps you are thinking we can’t afford this now.  However, investigating details about Directors and Officers (D&O) insurance may instead have you thinking we can’t afford not to have this now.
D&O insurance is protection against a “breach of duty” in the discharge of your service to the association.  This type of policy protects one if a member feels they have been discriminated, believes the assets of the association were not used properly, or if a member suspects the association of an error, omission, or misleading statement.  D&O insurance pays for actual or alleged wrongful actions including a failure to provide a service.
Ones homeowners and automobile insurance cover personal liability including bodily injury or property damage.  Umbrella policies can also be used for this purpose in which you the insured are liable, such as someone falling in your driveway due to snow and ice.  Neither homeowners/automobile nor umbrella policies provide protection for alleged or actual wrongful action.
D&O insurance covers damage from wrong decisions and not bodily injury or property damage.  If you are a board member and the association has a claim filed against it, once the assets of the association are depleted the board is then personally liable for costs incurred to settle the suit.  That means your personal assets may be used.  Do not assume because you are a volunteer you are not liable.  Volunteer service is no defense for improper or wrongful acts.  While you may be very committed to your association and its mission, you may need to ask yourself if you are willing to put up your house for it.
Kenneth Huff, President
The Association of Presidential Awardees in Science Teaching