Are volunteer board members of Georgia nonprofits personally liable without D&O?

Yes. Volunteer board members of Georgia nonprofits can be held personally liable for decisions they make in their role, and without directors and officers (D&O) insurance, their own personal assets may be exposed. Volunteering does not make a board member immune from being sued.

There are some legal protections. Federal and Georgia volunteer-protection laws can shield uncompensated volunteers from certain liability, and a nonprofit’s bylaws often promise to indemnify, meaning reimburse, board members. But these protections have real limits. They do not stop someone from filing a lawsuit, they do not cover the cost of defending one, and indemnification is worthless if the nonprofit lacks the money to pay.

D&O insurance fills that gap. It pays to defend board members and covers settlements or judgments tied to their governance decisions, protecting their personal finances.

Common claims against nonprofit boards include allegations of mismanagement of funds, employment disputes such as wrongful termination, conflicts of interest, and breach of duty.

Example: a former employee sues a Georgia nonprofit and names individual board members, alleging the board approved an unlawful termination. Defending the directors costs $65,000 in legal fees. The nonprofit’s bylaws promise indemnification, but its small budget cannot absorb the cost. A D&O policy covers the defense and protects each board member’s personal savings and home.

Qualified people are often reluctant to serve on boards that cannot protect them, which is why many nonprofits carry D&O coverage when recruiting volunteers. A free coverage review checks how a board is protected.