Re: Board Liability Insurance
From: Sharon Villines (
Date: Wed, 15 Feb 2006 07:30:00 -0800 (PST)

On Feb 14, 2006, at 5:05 PM, Linda Merrill wrote:

Greetings! I am part of Arboretum Cohousing, an exciting new cohousing group in Madison, WI. We have had a discussion about the need for our Board of Directors to have liability insurance. WI has good protective laws regarding boards of private nonprofits. Many of us feel we don't need it. What pathe have other organizations followed? Any thoughts?

This insurance is very cheap and is worth every penny. Everyone in our community has served on some board or the other in "real life" and insists on having this insurance. A friend who is a consultant to organizations and boards called me at 2:30 in the morning in response to an email I written earlier in the day saying that a board I was on had no insurance. She insisted I get up and send an email resigning from the board before she would get off the phone.

At Takoma Village when we discovered that our management company didn't think we had it, we actually resigned immediately. It only lasted a few minutes because our manager found the papers, but that shows how serious the issue is to people who have experience serving on boards.

Depending on how you are incorporated, your board members are the people who are legally responsible for various damages or bad decisions. Even your own residents can sue you. Of course, we know this would never, never happen (right?) but it's better to be safe than sorry.

Remember, you are serving on the board of directors of a multi-million dollar real estate project, not you neighborhood pot-luck supper club. And most of us are amateurs at the real estate business side of things. Mistakes are easy to make and can be very costly.

Sharon Villines
Takoma Village Cohousing, Washington DC

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