nishtdayngesheft – It is common at any “board” (including a non-for-profit), that the individual members of the board have their own Directors and Officers (D&O) insurance for a number of reasons, not limited to:
1: The dollar limits of the board’s insurance may run out.
2: There may be a conflict of interest between the board and the member, so that the member will not be insured.
3: The member may be sued individually so that the board’s insurance does not apply.
If the members of the board decided not to buy their own insurance and still enter the public arena and be subject to a D&O liability, they only have to look at themselves. They can choose not to be on the board.
Abba_S: My understanding of the issue (and only from what I’ve read here) is that the insurance was not to defend the members (which is what normal D&O insurance covers), but rather to reimburse legal fees for lawyers that the board chose. Your comment is not relevant.