We are looking to incorporate our club and one member asked if there were many clubs that are incorporated. Any answer or advice would be greatly appreciated!
Foam Blowers of Indiana just recently incorporated after some 25 years of operation. It is the right thing to do. It protects the members from lawsuits. It does put the officers on the line though.
Martin, Would the AHA insurance that was just proprosed protect the officers?
If not incorporated then the club should form another appropriate limited liability entity. LLC is probably the best option, even over forming a corporation.
A limited liability entity will require the officers to conduct certain activities to operate the entity and preserve its limited liability status. Insurance may protect the officers from certain individual activities but, without seeing the policy language, I would be extremely surprised if the D&O policy recently offered would indemnify the entire organization against a claim that pierced the corporate veil because the officers failed to preserve the limited liability status. The insurance policy may indemnify the officers from claims by the club against themselves but that isn’t very helpful to the members.
Our club has carried insurance for several years now (before the AHA offered a policy) and we actually have insurance for the club and another policy specifically for the board.
We incorporated a few years ago. The laws vary so much state-to-state that it’s just guessing to say our situation parallels yours. Get a lawyer. Our total legal fees were under $2000, and it changed the way we do a lot of things (a lot more rigor in documentation, for instance), but everyone is much more confident in our protection, and it has made recruiting new officers a bit easier.
Check out this thread: https://www.homebrewersassociation.org/forum/index.php?topic=20118.15