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Does your personal umbrella insurance cover you as a board member?



Are you a member of a board? As a way of "giving back", many sit on the board, and perhaps more than one. While this is a wonderful way to serve your community, it is important to know if there is insurance coverage to protect and defend you from the decisions you make as a board member.

Often the organization will purchase a policy for directors and officers for this very reason. So it is always a good idea to ask if the organization has a policy for directors and officers (abbreviated D&O).

But I also know that most people do not even think about asking for a D&O policy (because they do not know how to ask) or mistakenly assume that they have coverage under one of their personal policies, namely a personal umbrella policy.

The point of this post is to discuss whether your personal insurance (namely, personal umbrella insurance) provides any coverage if you sit on a board. Time to get rid of dangerous assumptions and encourage yourself to think about questions you can ask your own insurance agent.

You CAN have some coverage as a board member, but check the exceptions

As a general rule, you CAN cover your time on the board, but it often depends on the type of organization it is (for example, for-profit) and whether you get paid for your time or not. Below are three real personal umbrella exceptions that are raised directly from our companies' policies. This gives you several good examples of what personal umbrella insurance really offers in terms of coverage.

Board of Directors Exclusion No. 1

All acts or omissions by someone we protect as a board member or board member of any company or other organization, except non-profit companies or organizations.

So in this example, it seems if the organization is non-profit, you would have some coverage. You ALWAYS want to consult your insurance agent regarding your insurance. But this shows you the real language used and hopefully will be the spark for you to have that conversation.

Board of Directors Exclusion no. 2

Personal injury or material damage as a result of the insurance's act or omission as a master or board member of any company or other organization. This exception does not apply to a non-profit company or an organization for which such an official or member does not receive a salary.

Here it seems that non-profit organization is also a requirement, BUT you can not get money for your time. Many organizations pay their board members, usually per meeting.

Board of Directors Exclusion No. 3

"Personal injury", "property damage" or personal injury "as a result of an" insured "position as an official or member of a board. However, this exception does not apply to" bodily injury "," property damage "or" personal injury "as a result of an" insured "position as an official or board member of a non-profit organization for which" insured "is not compensated.

Like exclusion no. 2, non-profit activities are a requirement for the coverage to apply AND the board member may not receive any compensation either.

Yes, personal umbrella insurance CAN cover you as a board member

Judging by these examples, the chances are good if the organization is a) non-profit and b) you do not get paid to be a board member. Any combination of these may entitle you to coverage.

Here are some additional resources about umbrella insurance.

What is not covered by a personal umbrella insurance

The umbrella insurance covers medical malpractice to eliminate dangerous assumptions and lead to a conversation with your insurance agent or your company. We do not like nasty surprises and I'm sure you do not either!

Do you know what your policies provide? Or if a personal umbrella insurance suits your situation and provides the coverage you need? Call us at (937) 592-4871 or fill out the form below. We are happy to review your policies!


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