Before you say yes to joining your local board of directors, think carefully. One of the biggest concerns in joining a board is a potential lawsuit against the organization and its board members. If your board is sued—or you are named individually in a suit against the organization—who will pay for your legal defense?
Though your homeowners, renters or condo insurance policy has liability coverage for you if you are named in a lawsuit alleging personal injury to someone else, that coverage might not extend to activities you engaged in as a member of a board of directors. Without that personal protection, you could face steep attorneys fees and other costs associated with the legal action against the board.
Check with the organization to make sure it carries directors and officers (D&O) liability insurance. And speak to your insurance professional about independent directors liability coverage to see if that is a good option for you as well.