Individuals who are asked to serve on Catholic and other private school boards may have questions or concerns about their potential personal liability in connection with board service. This article discusses several ways in which school board members are protected from personal liability in Maryland.
1. Federal Volunteer Protection Act
At the federal level, the Volunteer Protection Act generally protects volunteers of non-profit organizations from personal liability for acts or omissions within the scope of the volunteer’s service. There are some exceptions to this protection, such as criminal misconduct on the part of the volunteer.
2. Maryland State Immunity Laws
In Maryland, additional protections extend to volunteer school board members under several immunity statutes. Under the Maryland Volunteer Service Act, volunteers of a charitable organization generally are not liable for damages beyond the limits of their personal insurance. Another statute provides that agents (including board members) of a charitable organization generally are not personally liable if the organization maintains certain levels of insurance that cover the claim. Finally, directors of a Maryland corporation are fully immune from individual liability if they act in good faith, in a manner they reasonably believe to be in the best interests of the corporation, and with the care of an ordinarily prudent person in a similar position.
Like the federal Volunteer Protection Act, the Maryland immunity statutes contain various exceptions. For example, the protections may not extend to gross negligence or willful or intentional misconduct on the part of a school board member.
3. Insurance Coverage
Often, the insurance policy of the school covers any officer, board member, employee, volunteer or agent of the school for acts or omissions in connection with the individual’s service. (Of course, usually there are limitations and exclusions in the policy that would apply to all covered persons, including board members.) Board members should inquire about insurance coverage with the school administrators.
4. Indemnification
Under Maryland law, a corporation is required to indemnify its directors and officers for their reasonable expenses in connection with the successful defense of a legal proceeding. In addition, a corporation is permitted to indemnify its directors, officers, employees or agents against judgments, penalties, fines, settlements and reasonable expenses for legal proceedings related to their service, with certain exceptions (e.g., bad faith or dishonesty on the part of a board member). Many school corporations have included indemnification provisions in their governing documents.
In summary, there are multiple levels of liability protection for private school board members. While the details of the protections vary, the exceptions generally relate to criminal acts or other deliberate misconduct.
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