We are a small 501(c)(3) theatre group. All of our board members serve without pay. Our annual budget is $10,000 to $15,000. Some of our members have substantial property. Do we need board insurance?
I am not sure what you mean by “board insurance.” I certainly recommend that you obtain general liability insurance that covers both the organization and the Board members if anyone is injured in an accident. Very small organizations such as yours may be willing to take the risk of not having directors’ and officers’ insurance because it primarily covers breach of fiduciary duty and there may not be enough at stake to encourage anyone to sue. As volunteers, you have an additional level of protection against liability. (See Ready Reference Page: “Federal Law Protects Nonprofit Volunteers.”) We generally recommend D & O insurance because it pays the costs of litigation if there is a suit, even where there is little likelihood of personal liability. Check with a broker who understands nonprofits and knows your organization for a professional recommendation.