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Author Topic: Club LIABILITY?  (Read 24746 times)

Posts: 2

« on: October 17, 2000, 06:03:41 PM »

Our club is considering becoming "incorporated" to limit member liability.  This involves hiring an attorney and paying fees (about $850), drawing up a set of bylaws, keeping minutes of meetings to demonstrate compliance to corporate rules, record activities and person(s) who authorize those activities, making a report to the government on a regular basis and sending in the annual fees, to name some of the requirements.

There was an incident in a hunting club where a member shot another hunter and each club member was sued for about $130,000 personally.  If incorporated, only the club could be sued and nobody would have personal liability as a member.

My question is:   Is there a serious liability involved in a ham radio club?  If one of the members were to record cell phone traffic, for example... would we all be in trouble for his misdeed?  Would it be worth the cost and trouble of forming a corporation to limit member liability?

Posts: 44

« Reply #1 on: November 25, 2000, 10:30:19 PM »

You hit it right on the mark. If something happens during one of your club projects, yes the members can be involved in deep financial trouble.
However, there is an up side to becoming incorporated, if you are a non-profit organization, and part of your duties are for community service (hey - ham radio communications during emergencies!) then you can apply for, and get a tax deferment for the club. AND local businesses, or people, can DONATE to your club and write it off on their taxes. Hmmmmmm need a new repeater site? Maybe there is a willing land owner/tower owner/building owner) that will allow you to put your repeater up - the owner can then use your free rent as a tax deduction - you win - he wins. By all means go for the incorporation status. Look around, you should be able to find someone to get you on the right track for a lot less than 850.

« Reply #2 on: December 07, 2000, 06:21:41 PM »

Until you get tax exempt status,

contact a local insurance agent and
get some quotes on club liability

This will help until you get incorporated.

Contact other clubs in your area, they may
already have do it and can help.
Even use their attorney and adapt their club
bylaws into your own.

good luck

Posts: 32

« Reply #3 on: December 28, 2000, 09:18:08 PM »

If you incorporate as a non-profit you will have a board of directors. This board may then be liable for incidents that occur during a club activity. If a member commits an illegal act or injures himself or others while under club control such as a field day outing or hamfest, the club, and therefore the board of directors could indeed be held liable for that act.

I served on the board of a nonprofit, and in searching for insurance we found rates averaged around $1200/year which is beyond, way beyond the resources of most clubs. We ended up joining forces with a number of statewide clubs and got the insurance premium to cover all of the organizations in the state interested in insurance. Naturally these clubs will have to have a common denominator such as ARRL membership. You can not join forces with the state wide PTA or 4H. This might be a good question for your ARRL section manager. Whatever route you take, it is a real hassle. While waivers signed by members sound great in terms of limiting liability, they are not the answer, and will not stand up in a court of law.
Good luck and 73s

Posts: 14

« Reply #4 on: February 06, 2001, 08:26:59 AM »

I am on the Board of an ARC, we pay under $1,000.00 per year for a 1 million liability policy.

We became Incorporated about 30 years ago to avoid "ANY" member be it board or otherwise being held liable..

I would contact the ARRL for further advice.  


« Reply #5 on: February 06, 2001, 03:08:01 PM »

You can easily determine whether you are at risk of being sued by answering the following: Do you have significant money or other assets, or do you carry liability insurance?

If the answer to either part is "yes" then you can be sued. If the answer to both parts is "no' then you will not be sued, because no plaintiff's lawyer will take the case.

Cynical? Yes.  True? Absolutely!

« Reply #6 on: March 28, 2001, 12:18:31 AM »

DISCLAIMER:  I'm an attorney, but not YOUR attorney, and maybe not licensed in your state, so this is general information only and not legal advice.  Check with your own lawyer before taking any action.

It's crazy not to incorporate.  Incorporation, when properly done, does indeed protect individuals from the financial liabilities of the club.  What if someone is electrocuted at an event and it's not through the negligence of any one person?  What if someone slips and breaks a leg on club property or at a club event?  Your spouse and children might end up paying the damages if the club is not incorporated.

You still need appropriate property, liability, director and umbrella insurance.  Our church pays about $100 per year for substantial board of director coverage.

You must respect the corporate form.  Have the required annual meetings, keep good minutes, etc.  It's not hard to do.  If you do this, it is hard for anyone to recover from individual members or directors.

Account for club monies properly.  If you don't know how, find someone who can.  Then file proper tax or information returns.

Finally, if at all possible, get nonprofit status.  You can receive tax-deductible contributions, and pay no income taxes (except for unrelated profit making activites).


Posts: 2

« Reply #7 on: June 07, 2001, 10:33:28 AM »

We have had this issue come up recently at our local club meeting.We are a small club with mostly older members who for the most part are comfortable having a few do all the work.Sound familar? During the discussion we even had one member quit.I think the whole issue is being annal retentive but if it is keeping people up at night, I would suggest disbanding your club and just have a bunch of friends who like to hang out a couple nights a month at a restaurant.The fact is that the legal requirements and the work and money involved are not going to magically go away. The truth is that you do not need the guise of a "Club" in order to get together and do things.

Posts: 73


« Reply #8 on: January 10, 2002, 02:43:12 PM »

I totally agree. If you're into clubs for the exchange of technical information then Online clubs and web sites are the way to go. If you're in a club for the social aspect then that can be accomplished over a BBQ or breakfast at I-Hop. In my case, I can only get out to a meeting on Saturday Mornings (7:00 a.m). Young family on the go.  Therefore, I'm not in a club and by the time I'm retired (30 yrs) and the kids are gone.....well, there won't be any clubs and their total migration to Web will complete.

Posts: 7

« Reply #9 on: April 20, 2002, 01:20:33 PM »

The ARRL offers Club Liability and Equipment Insurance (through a carrier) to all affiliated clubs.

If your club meets the requirements (51% licensed hams and 51% ARRL members plus a few charter-related specifications) you can obtain inexpensive insurance through them.  We pay well under $1000 - closer to $500 annually for $2,000,000 coverage.

If you have a repeater tower and someone climbs it and falls or someone gets injured at a Club event you will certainly want some coverage.

Good luck!

73 de Mark

Posts: 720


« Reply #10 on: June 28, 2002, 04:02:49 PM »

I would like to throw in my two cents.  Some have indicated that you must incorporate before becoming tax-exempt.  This is not true.  Any charitable, non-profit, social service or recreational club type organization, association, or group of individuals can get 501(c)3, 4 or 7 status by getting a TIN from the IRS and filling out the appropriate paperwork--the application is long, but not too difficult.  Incorporation is not necessary.

In a related matter, I would also suggest any organization or group check their state regulations regarding solicitations and contributions.  Most states require that groups either be registered or be declared exempt from registration before solicitations can begin.  It's a matter of consumer protection.

Steve Matda, KE4MOB
President, Russell County (Va) ARC


Posts: 79

« Reply #11 on: July 03, 2002, 12:25:13 AM »

And if your club IS ARRL affiliated , check out the "Volunteer Counsel" program . ARRL will refer you to a ham lawyer in your area who can help with incorporation , probably at greatly reduced cost .

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