Having Liability Insurance for a Non-Profit Organization

"Hi, this is Jim Goettler with Expert Village and this a video about how to form and operate a non-profit organization. As you've been watching into these segments, you've seen us go from the beginning organization in someones living room to going through the fund raising and finally filing for 1023 to become a non-profit. You're starting to expand the organization which means there's going to be extra problems you're going to have to address. One of the biggest problems that new board members particularly ask is about board liability. What are they responsible for? Do they need to take board liability insurance? There's two answers to that question that's a yes and a no. No you don't need board liability insurance if you're not hiring staff or you don't own any real property. The fact that you are a corporation with the paper through your state means the state has looked at your organization and said you're a okay organization, you have your deduction role, the corporation is actually responsible for the day to day things that you do. So as long as things are done in good faith and you don't do anything as I say stupid, you should be fine. Again, if there's questions ask a lawyer, I am not a tax lawyer. Board liability insurance does come into play when you hire employees where there may be issues of disorderly employee lawsuits or when you own property where there's questions of liability may come up. At that point, you may want to consider liability insurance. Otherwise there's really no need for it at the early stage. If you have questions, please consult a lawyer. The next section I'm going to cover quickly will be the dynamics between a board of directors and the operations or staff part of your organization. Stay with me."