Coverages: HO Coverage for Volunteer Board Service

Are board members covered by homeowner policies, if sued in their capacity as volunteers?

An agent asks: “Under the homeowners policy, is there personal liability for individuals who serve as volunteers on a board? An example would be an insured who is on the board of directors of the local chamber of commerce. The insureds are not paid; it is strictly on a volunteer basis.

“We asked one of our homeowners companies, and they said no due to an exclusion for professional services. The exclusion stated that Coverage E does not apply to ‘’bodily injury’ or ‘property damage’ arising out of the rendering of or failure to render professional services.’ I don’t feel volunteering would be considered professional services since there is no consideration involved.”

Most coverage experts consider the Homeowners exclusion broad enough that it doesn’t require remuneration for a specific act in order that the professional services exclusion applies. If a doctor performs an emergency procedure in a non-business situation, that is still the rendering of a professional service within that interpretation. In addition, claims that arise from a person’s service on a board often are excluded from an Homeowners policy because they don’t constitute “bodily injury” or “property damage” as defined by the policy.

Here’s what the VU faculty had to say on this subject:

One’s service on a board of directors should be covered by a Directors and Officers (D&O) liability policy, not a homeowners policy. Agents should offer this coverage to their Homeowners insureds, or advise them to consider avoiding any board that doesn’t protect their volunteer directors under a D&O policy.

The term “professional” refers to a defined concept that includes completion of well-recognized and fully-accredited educational requirements, successful completion of governmental mandated examinations, and admission to the profession by an accreditation board. Anyone can serve on a Chamber of Commerce board without being a “professional.”

Service on non-remunerative community service organizations is a serious liability issue. Key among these issues are injury to people (bodily injury) and libel, slander and defamation of character (personal injury). Personal liability, automobile and personal umbrellas can be used for community service exposures to some extent. For example, the Homeowners policy can be endorsed to include personal injury, such as libel and slander. But many community service organizations have exposures beyond the scope of BI/PD/PI coverage under a homeowners, personal automobile or personal umbrella policy.

Meanwhile, members of a chamber board actively involved in economic development or major community service activities may have serious Directors & Officers exposures. Unless the chamber member is a genuine professional and engaged in providing professional services as part of his or her board duties, the Homeowners policy should apply as long as the liability insuring agreement is triggered.

Bill Wilson (bill.wilson@iiaba.net) is director of the Big “I” Virtual University.


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