State Codes and Statutes

Statutes > California > Corp > 24001.5

CORPORATIONS CODE
SECTION 24001.5



24001.5.  (a) The Legislature finds and declares that the services
of directors or officers of nonprofit medical associations, as
defined in Section 21200, who serve without compensation are critical
to the efficient conduct and management of the public service and
charitable affairs of the people of California. The willingness of
volunteers to offer their services has been deterred by a perception
that their personal assets are at risk for these activities. The
unavailability and unaffordability of appropriate liability insurance
makes it difficult for these associations to protect the personal
assets of their volunteer decisionmakers with adequate insurance. It
is the public policy of this state to provide incentive and
protection to the individuals who perform these important functions.
   (b) Except as provided in this section, no cause of action for
monetary damages shall arise against any person serving without
compensation as a director or officer of a nonprofit medical
association, as defined in Section 21200, on account of any negligent
act or omission occurring (1) within the scope of that person's
duties as a director acting as a board member, or within the scope of
that person's duties as an officer acting in an official capacity;
(2) in good faith; (3) in a manner that the person believes to be in
the best interest of the association; and (4) is in the exercise of
his or her policymaking judgment.
   (c) This section shall not limit the liability of a director or
officer for any of the following:
   (1) Self-dealing transactions, as described in Sections 5233 and
9243.
   (2) Conflicts of interest, as described in Section 7233.
   (3) Actions described in Sections 5237, 7236, and 9245.
   (4) In the case of a charitable trust, an action or proceeding
against a trustee brought by a beneficiary of that trust.
   (5) Any action or proceeding brought by the Attorney General.
   (6) Intentional, wanton, or reckless acts, gross negligence, or an
action based on fraud, oppression, or malice.
   (7) Any action brought under Chapter 2 (commencing with Section
16700) of Part 2 of Division 7 of the Business and Professions Code.
   (d) This section only applies to nonprofit organizations organized
to provide charitable, educational, scientific, social, or other
forms of public service that are exempt from federal income taxation
under Section 501(c)(3) or 501(c)(6) of the Internal Revenue Code.
   (e) This section applies only if the nonprofit association
maintains a liability insurance policy with an amount of coverage of
at least the following amounts:
   (1) If the association's annual budget is less than fifty thousand
dollars ($50,000), the minimum required amount is five hundred
thousand dollars ($500,000).
   (2) If the association's annual budget equals or exceeds fifty
thousand dollars ($50,000), the minimum required amount is one
million dollars ($1,000,000).
   This section applies only if the liability insurance policy is
applicable to the claim.
   (f) For the purposes of this section, the payment of actual
expenses incurred in attending meetings or otherwise in the execution
of the duties of a director or officer shall not constitute
compensation.
   (g) Nothing in this section shall be construed to limit the
liability of a nonprofit association for any negligent act or
omission of a director, officer, employee, agent, or servant
occurring within the scope of his or her duties.
   (h) This section does not apply to any association that unlawfully
restricts membership, services, or benefits conferred on the basis
of political affiliation, age, or any characteristic listed or
defined in subdivision (b) or (e) of Section 51 of the Civil Code.
   (i) This section does not apply to any volunteer director or
officer who receives compensation from the association in any other
capacity, including, but not limited to, as an employee.


State Codes and Statutes

Statutes > California > Corp > 24001.5

CORPORATIONS CODE
SECTION 24001.5



24001.5.  (a) The Legislature finds and declares that the services
of directors or officers of nonprofit medical associations, as
defined in Section 21200, who serve without compensation are critical
to the efficient conduct and management of the public service and
charitable affairs of the people of California. The willingness of
volunteers to offer their services has been deterred by a perception
that their personal assets are at risk for these activities. The
unavailability and unaffordability of appropriate liability insurance
makes it difficult for these associations to protect the personal
assets of their volunteer decisionmakers with adequate insurance. It
is the public policy of this state to provide incentive and
protection to the individuals who perform these important functions.
   (b) Except as provided in this section, no cause of action for
monetary damages shall arise against any person serving without
compensation as a director or officer of a nonprofit medical
association, as defined in Section 21200, on account of any negligent
act or omission occurring (1) within the scope of that person's
duties as a director acting as a board member, or within the scope of
that person's duties as an officer acting in an official capacity;
(2) in good faith; (3) in a manner that the person believes to be in
the best interest of the association; and (4) is in the exercise of
his or her policymaking judgment.
   (c) This section shall not limit the liability of a director or
officer for any of the following:
   (1) Self-dealing transactions, as described in Sections 5233 and
9243.
   (2) Conflicts of interest, as described in Section 7233.
   (3) Actions described in Sections 5237, 7236, and 9245.
   (4) In the case of a charitable trust, an action or proceeding
against a trustee brought by a beneficiary of that trust.
   (5) Any action or proceeding brought by the Attorney General.
   (6) Intentional, wanton, or reckless acts, gross negligence, or an
action based on fraud, oppression, or malice.
   (7) Any action brought under Chapter 2 (commencing with Section
16700) of Part 2 of Division 7 of the Business and Professions Code.
   (d) This section only applies to nonprofit organizations organized
to provide charitable, educational, scientific, social, or other
forms of public service that are exempt from federal income taxation
under Section 501(c)(3) or 501(c)(6) of the Internal Revenue Code.
   (e) This section applies only if the nonprofit association
maintains a liability insurance policy with an amount of coverage of
at least the following amounts:
   (1) If the association's annual budget is less than fifty thousand
dollars ($50,000), the minimum required amount is five hundred
thousand dollars ($500,000).
   (2) If the association's annual budget equals or exceeds fifty
thousand dollars ($50,000), the minimum required amount is one
million dollars ($1,000,000).
   This section applies only if the liability insurance policy is
applicable to the claim.
   (f) For the purposes of this section, the payment of actual
expenses incurred in attending meetings or otherwise in the execution
of the duties of a director or officer shall not constitute
compensation.
   (g) Nothing in this section shall be construed to limit the
liability of a nonprofit association for any negligent act or
omission of a director, officer, employee, agent, or servant
occurring within the scope of his or her duties.
   (h) This section does not apply to any association that unlawfully
restricts membership, services, or benefits conferred on the basis
of political affiliation, age, or any characteristic listed or
defined in subdivision (b) or (e) of Section 51 of the Civil Code.
   (i) This section does not apply to any volunteer director or
officer who receives compensation from the association in any other
capacity, including, but not limited to, as an employee.



State Codes and Statutes

State Codes and Statutes

Statutes > California > Corp > 24001.5

CORPORATIONS CODE
SECTION 24001.5



24001.5.  (a) The Legislature finds and declares that the services
of directors or officers of nonprofit medical associations, as
defined in Section 21200, who serve without compensation are critical
to the efficient conduct and management of the public service and
charitable affairs of the people of California. The willingness of
volunteers to offer their services has been deterred by a perception
that their personal assets are at risk for these activities. The
unavailability and unaffordability of appropriate liability insurance
makes it difficult for these associations to protect the personal
assets of their volunteer decisionmakers with adequate insurance. It
is the public policy of this state to provide incentive and
protection to the individuals who perform these important functions.
   (b) Except as provided in this section, no cause of action for
monetary damages shall arise against any person serving without
compensation as a director or officer of a nonprofit medical
association, as defined in Section 21200, on account of any negligent
act or omission occurring (1) within the scope of that person's
duties as a director acting as a board member, or within the scope of
that person's duties as an officer acting in an official capacity;
(2) in good faith; (3) in a manner that the person believes to be in
the best interest of the association; and (4) is in the exercise of
his or her policymaking judgment.
   (c) This section shall not limit the liability of a director or
officer for any of the following:
   (1) Self-dealing transactions, as described in Sections 5233 and
9243.
   (2) Conflicts of interest, as described in Section 7233.
   (3) Actions described in Sections 5237, 7236, and 9245.
   (4) In the case of a charitable trust, an action or proceeding
against a trustee brought by a beneficiary of that trust.
   (5) Any action or proceeding brought by the Attorney General.
   (6) Intentional, wanton, or reckless acts, gross negligence, or an
action based on fraud, oppression, or malice.
   (7) Any action brought under Chapter 2 (commencing with Section
16700) of Part 2 of Division 7 of the Business and Professions Code.
   (d) This section only applies to nonprofit organizations organized
to provide charitable, educational, scientific, social, or other
forms of public service that are exempt from federal income taxation
under Section 501(c)(3) or 501(c)(6) of the Internal Revenue Code.
   (e) This section applies only if the nonprofit association
maintains a liability insurance policy with an amount of coverage of
at least the following amounts:
   (1) If the association's annual budget is less than fifty thousand
dollars ($50,000), the minimum required amount is five hundred
thousand dollars ($500,000).
   (2) If the association's annual budget equals or exceeds fifty
thousand dollars ($50,000), the minimum required amount is one
million dollars ($1,000,000).
   This section applies only if the liability insurance policy is
applicable to the claim.
   (f) For the purposes of this section, the payment of actual
expenses incurred in attending meetings or otherwise in the execution
of the duties of a director or officer shall not constitute
compensation.
   (g) Nothing in this section shall be construed to limit the
liability of a nonprofit association for any negligent act or
omission of a director, officer, employee, agent, or servant
occurring within the scope of his or her duties.
   (h) This section does not apply to any association that unlawfully
restricts membership, services, or benefits conferred on the basis
of political affiliation, age, or any characteristic listed or
defined in subdivision (b) or (e) of Section 51 of the Civil Code.
   (i) This section does not apply to any volunteer director or
officer who receives compensation from the association in any other
capacity, including, but not limited to, as an employee.