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Nonprofit Law/liability for 501c3


My question isn't about taxes.  If you can't answer it, I wondere if you know where I might obtain the answer.  

I am a committee chairperson for a MA incorporated 501c3.  We have been talking about obtaining liability for the entire council because of today's litigious environment.  We have a lot of policies and procedures we follow but, even after 25 years in operation, there are still some conflicts.  I asked my insurance provider if I could get individual non profit board member insurance since several people have said it's available.  My insurance provider says it's not.  Can you advise if it is and, if so, what it's called?  I was told it was VERY reasonable.  An umbrella policy may be about $500 or more (no reasonable to me) and I am not sure it's the right coverage.

I can inform you that volunteers of 501(c)(3) organizations are protected by federal law except as to driving a vehicle. That exception is discussed at: citing to
each state's law.

See which is page 130 of the Book
A Desktop Guide for Nonprofit Directors, Officers and Advisors by
Jack B. Siegel which discusses the Federal Volunteer Protection Act
starting on that page

on page 132 we see a discussion of a recent Federal court case
that interpreted the Act:

---Start of Excerpt--
One court has held that the executive director of a nonprofit youth
center could not recover unpaid wages under the Fair Labor
Standards Act from the volunteer directors because the Volunteer
Protection act served as a shield to liability. Armendarez v.
Glendale Youth Center, Inc. 256 F. Supp. 2d 1136 (D.C. AZ 2003).

The case specifically holds that the act applies to claims rooted
in contract, not just tort law.  Moreover, the court also held that
the act applies to liability under federal and individual state
law. ... It is hornbook corporate law that the directors of a
corporation are not liable for its obligations (unless there is a
statute that specifically imposes liability on the directors).
---End of Excerpt--

The Federal Volunteer Protection Act of 1997, generally speaking,
provides immunity from tort claims that might be filed against the
volunteers of nonprofit organizations.

The law is 42 U.S.C. 14501 and the following few sections

Therefore, unless, you are receiving compensation, I strongly suggest not wasting the money of the 501(c)(3) organization in obtaining a policy that will probably not give any more extensive liability coverage.

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic


I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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