Charitable Organization Immunity – Liability and your Non-Profit Immunity
In an effort to promote more volunteerism, The Texas legislature passed the Charitable Immunity and Liability Act in 1987 which primarily applies to the directors and officers of not for profit entities and the employees and volunteers that work for them, and while we all recognize the need this law like most things is not perfect and has its own loopholes.
Well intended, but…
This law sounds great in theory, but there are many “loopholes” and exceptions, and we don’t mean that in a good way as far as you are concerned. Here are a few reasons why you and your fellow board members should consider purchasing all kinds of liability insurance with high limits of liability.
- The law only limits recovery for bodily injury and property damage. It does not limit other potential claims, such as libel, slander or discrimination. The law does not apply to the duties or liabilities of a board member or an officer to the organization or its members. Nor does the law prohibit plaintiffs from filing suit; these suits still must be defended.
- The immunities and limits on liability do not apply to an act that is intentional, willfully or wantonly negligent, or done with conscious or reckless disregard for the safety of others.
- The liability of the organization and its employees is limited to $1 million per occurrence. The limitation applies only if the organization carries liability insurance for the amounts stated.
- A volunteer is personally liable for damage or injury arising from the operation or use of a motor vehicle, to the extent insurance coverage is required by the Texas Motor Vehicle Safety Responsibility Act, and to the extent of any existing insurance coverage applicable to the act or omission. If your organization owns motor vehicles, the organization’s auto liability insurance may be the only protection available for a volunteer.
What we recommend for non-profits
In the end, don’t be misled or distracted by the immunities and limitations provided under the law, there are just too many problems and exceptions that can come into play. This is why we always recommend both General Liability and Directors and Officers Liability – at a minimum.
Want to learn more about the particular needs of your non-profits? Call us! 214-265-1221