This is not an issue of D&O (Generally the organization has D&O, not the individual members). The members were indemnified by the board. The board wanted to collect from a state agency that is supposed to cover law suits. Sort of a self insurance policy by the state. So it is a matter of the district recovering money.
I agree, and that was my point to Abba_S as well.
I was commenting on your point of the board members having to rely on substandard lawyers. If the board members are concerned, they should have their own D&O insurance (which they should have anyway). I disagree with your “generalization” that board members should not have their own D&O policies separate from the board, for the reasons stated above.
P.S. As I’ve posted in other threads, I believe the monitor will show that there is a severe funding problem in the district, and will either force a tax increase or a change in funding methodology.