§ 104.009.Directors' and Officers' Liability Insurance

An insurance authorisation, and the deductible requirement is what makes it fit the chapter.

A state agency, institution, or department may purchase a directors’ and officers’ liability insurance policy applicable to conduct described under the covered-conduct section and other conduct customarily covered by such policies, for the benefit of a director or officer, a member of a governing board, commission, or council, or a member of the executive staff.

The purpose is recruitment. Serving on a state board carries exposure to suit, and capable people decline appointments they cannot be protected in.

The indemnification chapter alone is thin protection at the top. Its caps are $100,000 per person, and its exclusions for gross negligence and bad faith are precisely the allegations made against senior officials.

"Other conduct customarily covered" is the phrase that adds real value. A commercial policy responds to claims this chapter excludes, so the insurance reaches beyond statutory indemnification.

Subsection (b) requires the deductible applicable to the agency’s liability to equal the indemnification caps, though the deductible applicable to an individual’s liability may be set at a lower amount.

That is a careful piece of drafting. The state bears what it was already obliged to bear, and the insurance covers the excess — so the policy supplements the statute rather than paying what the statute already covers.

The lower individual deductible is the point of the arrangement, letting an official be protected from the first dollar.

Subsection (c) repeats the chapter’s standing caution: purchasing insurance does not waive a defense, immunity, or jurisdictional bar available to the agency or the insured.

That clause is not redundant. Buying liability insurance has been argued elsewhere to signal an acceptance of liability, and this forecloses the argument.