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Recognize Volunteer Leadership Loss Exposures

Bulletin – Monday, July 25, 2016

Here's a valuable tip from the International Risk Management Institute, Inc.to pass along to your personal lines clients.

Many people face a variety of community-related and volunteer-related loss exposures. For example, your client (or a resident family member) may hold some type of leadership role in a community, charity, religious, not-for-profit, or political organization. Your client should thus consider the following risk management recommendations.

  • Confirm that the appropriate directors and officers (D&O) coverage is in force.
  • Verify that the organization's by-laws include an indemnity agreement requiring reimbursement of costs of defense and settlement or judgment amounts due to your personal liability arising from your actions on behalf of the organization or the organization's own actions.
  • If your community service involves no remuneration or slight remuneration (e.g., under $2,000 annually), your homeowners policy may provide coverage, although the liability limits may be inadequate. To broaden this liability coverage to include more perils, consider adding the personal injury (HO 24 82) or similar endorsement to your homeowners policy to provide some protection from allegations such as libel, slander, and wrongful eviction.
  • Accounting audits may rarely be performed for not-for-profit organizations. As a result, you should ask and verify that audits are implemented for these organizations. Otherwise, your exposure to loss is greater.
  • In addition, personal umbrella coverage is warranted; an umbrella policy with broad protection arising from these types of activities should be selected.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2016
International Risk Management Institute, Inc.

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