The board set that condition to protect the district from any liability.
Board President Andy Horne said the board would have to approve the insurance package, which would have to include a $1 million liability policy.
IID attorney Orlando Foote said it is up to Hunter to determine how to meet the insurance conditions.
He said there are two ways it might be legally possible for Hunter to provide such insurance. First, Hunter could purchase the insurance and he and those working with him could take responsibility for doing the project. Second, Hunter could purchase the insurance in the name of IID and the district would head the project.
Foote said IID directors were advised of the liability the district could face.
However, he said the board has determined the positives of the lines outweigh the possible negatives.
The board also set the conditions that a study must be done to determine how to place the lines across the canal and the U.S. Bureau of Reclamation must approve the plans before the lines are set up.
The directors stated a study will have to be done once the lines are up to determine if they are saving lives or creating a more convenient corridor for smugglers.
Funding for the lines, about $95,000, would come from the Bureau of Reclamation.
Hunter, a brother of Congressman Duncan Hunter, who represents the Imperial Valley, said Tuesday he was pleased with the board's action.
"I'm quite happy with the results today," said Hunter, who said he planned to start seeking insurance for the lifeline project today.
Hunter proposed the idea of the lifelines to reduce drownings. Last year more than 30 people died in local waterways, mostly in the All-American.
Hunter has attended several IID board meetings to urge the directors to take action on the lifelines.
Director Bruce Kuhn has been one of the most vocal supporters on the board of Hunter's idea. Kuhn has said if the board can prevent deaths it should do so.
Imperial Valley resident Blake Miles, who has worked with Hunter on the lifelines idea, said it is possible to look at the issue from an economic standpoint. He said if there are fewer canal drownings, Imperial County could save money by not having to pay things such as coroner's and funeral costs.
"Hopefully there will be a significant net savings for the Valley," Blake said.
Allen said he thinks the lines could help the business of "coyotes" because those seeking to cross into the United States will see what they think is an easy route.
Allen said he would rather see signs be placed along the canal warning people of the danger in trying to cross the canal and the number of people who have died trying to cross the canal.
Staff Writer Darren Simon can be reached at 337-4082.