Do volunteer board members need liability insurance?

Volunteer status doesn't remove your governance duties. Board and committee members, paid or not, have real legal responsibilities. Breaching them can carry personal consequences. In Australia, board member liability insurance is usually called Association Liability Insurance. It protects eligible office bearers and the group together, though the exact protection varies by state and structure.

If you sit on a committee or board for a club, association or charity, this matters more than most volunteers realise.

Quick summary

• Volunteer board and committee members still have governance duties, and can face personal consequences for breaching them.
• In Australia, this cover is usually called Association Liability Insurance, not board member liability insurance, though both describe similar protection.
• Depending on the policy, it can bundle Directors and Officers cover, Professional Indemnity, Employment Practices Liability, fidelity or crime cover, and statutory liability.
• Association Liability doesn't include Public Liability. Most groups that run events or use a venue need both.

What legal duties do volunteer board members have?

Being incorporated protects your group as a separate legal entity, but it doesn't remove every duty its board or committee members carry. In several states, an incorporated association must indemnify office holders for liability incurred in good faith while performing their duties. But that indemnity is only as strong as the association's own assets if there's no insurance behind it. The exact rules also vary by state and organisation type.

The real exposure sits elsewhere. In Victoria, for example, a committee member who misuses their position, or breaches their duty of care or duty of good faith, can face personal penalties. A court can also order them to pay compensation. Registered charities have separate governance duties under the ACNC, which apply to board and committee members regardless of whether the role is paid.

A real-world example: a committee member of a sporting association was accused of making defamatory remarks about another member. The claimant threatened legal action and sought compensation and a retraction. Defending a claim like this, even successfully, involves real legal costs, which is exactly what Association Liability Insurance is built to cover.

What is Association Liability Insurance?

Association Liability Insurance is a specialised policy for boards and committees of associations, clubs and not-for-profits. It's usually built as a professional indemnity policy with some management liability cover added in, rather than a standalone personal liability policy. "Board member liability insurance" describes similar protection, but it isn't the product name you'll see when you get a quote in Australia.

Which clubs and associations should consider it?

This cover is built for groups run by a board or committee, including:

• Incorporated associations.
• Sporting and community clubs.
• Industry and professional associations.
• Charities and other not-for-profits.

When should an association consider this cover?

A few triggers are worth treating as a reason to look into cover, rather than waiting for something to go wrong:

• The association employs staff.
• The board or committee provides advice or services to members or the public.
• The organisation handles member funds or donations.
• The committee is large, or makes significant decisions on the group's behalf.
• The association enters contracts of real size, such as venue hire or sponsorship deals.
• The group manages complaints or disciplinary decisions involving members or staff.

What can Association Liability Insurance cover?

Depending on the policy, Association Liability Insurance can bundle several types of cover:

• Directors and Officers cover. Protects office bearers for claims about their decisions, such as alleged mismanagement.
• Professional Indemnity. Covers claims about advice or services the association provides.
• Employment Practices Liability. Covers claims about how the association manages staff or volunteers.
• Fidelity or crime cover. Addresses losses from theft or dishonest acts.
• Statutory liability. May extend to fines and penalties where legally insurable, subject to the specific policy.

What's included varies by insurer. Check the specific product rather than assuming they're all built the same way.

Association Liability vs Public Liability

These cover different problems. Public Liability responds to claims about people or property, such as an injury at an event the association runs. Association Liability responds to claims about how the group is governed, such as alleged mismanagement or a staff dispute.

Association Liability doesn't include Public Liability. If your association runs events, hires a venue, or has members and the public on site, you'll typically need both. One doesn't replace the other.

Association Liability vs D&O insurance

Association Liability isn't just D&O insurance renamed for volunteers. It's usually a professional indemnity policy with extras added in, like Directors and Officers cover, Employment Practices Liability and fidelity cover. Startup D&O, by contrast, is normally a standalone policy built around company directors. Both protect people from personal liability for their decisions, but the products are put together differently.

Are volunteer committee members covered?

Often, yes, but it depends on the policy. Some Association Liability policies name volunteer office bearers alongside paid staff and directors, so being unpaid doesn't automatically exclude you. Confirm this directly with your insurer or broker rather than assuming volunteers are included by default.

Comparing your options

Where to go next

If your organisation has a board or committee, it's worth talking to a broker about whether your current cover reflects how it's actually run. upcover arranges management liability insurance and professional indemnity insurance for eligible Australian organisations. Get in touch to discuss the right structure for an incorporated association, club or not-for-profit.

Get a quote with upcover

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upcover is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078.

Frequently asked questions

What legal duties do volunteer committee members have?

Board and committee members carry governance duties regardless of whether the role is paid. Breaching those duties, such as misusing your position or failing your duty of care, can carry personal consequences. The exact rules vary by state and organisation type.

Does being a volunteer remove my board responsibilities?

No. Governance duties apply to people in these roles regardless of whether they're paid. Registered charities have specific duties for "Responsible People" under the ACNC that apply to volunteers the same as paid board members.

What's the difference between association liability and public liability?

Public Liability covers claims about injury or property damage. Association Liability covers claims about how the organisation is governed, and doesn't include Public Liability. Most groups running events or using a venue need both.

What's the difference between association liability and D&O insurance?

Association Liability is usually a Professional Indemnity-based policy with added Directors and Officers, Employment Practices Liability and fidelity cover built in. Startup D&O is typically a standalone policy for company directors. Both protect against personal liability, but the products are structured differently.

Are volunteer committee members covered under association liability policies?

Often, yes, but it depends on the specific policy. Check with your insurer or broker to confirm volunteers are named, rather than assuming it.

Does association liability cover employment disputes?

It can. Many Association Liability policies include Employment Practices Liability as part of the bundle, subject to the specific policy.

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_{The information in this article has been prepared without taking into account your individual needs, objectives or financial situation. It should not be relied upon as personal advice. All insurance products arranged through upcover are subject to the terms, conditions, limits and exclusions contained in the relevant policy wording and Product Disclosure Statement. Before deciding whether a particular insurance product is right for you, please read the relevant PDS and consider your personal circumstances. upcover Pty Ltd ABN 17 628 197 437 is a Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.}