Taking It Personally: Board members of municipal agencies face personal liability for public service

Public Risk Management Association

PUBLISHED ON: January 1, 2006

Each year, members of the boards of municipal agencies volunteer their time, intellect and expertise in the name of public service. These board members generally ask for nothing in return for their efforts. Unfortunately, lack of compensation does not equal lack of allegations of potential liability. Claimants' counsel gives no credit for civic-mindedness nor altruistic motives of uncompensated municipal board members. Anyone serving on the board of a municipal entity can be targeted in a lawsuit.

Accordingly, those serving governmental corporations should make sure that they maximize the protection available to board members through directors' and officers' (D&O) liability insurance, indemnification statutes and other protective measures. They should be aware of the risks they face and the protections for those risks. Being better prepared and better armed will enhance our board's protections.