Product Fundamentals: Association Liability Insurance
What is Association Liability and who should consider it?
Association Liability (AL) is a packaged policy comprising numerous coverage sections with the main coverages being Professional Indemnity and Management Liability protecting against legal costs and damages that could arise from allegations of misconduct, mismanagement, employment issues and more.
- Charity / Benevolent Foundations
- Unpaid Amateur Sporting Associations
- Trade Industry / Union Associations
- Religious Groups
- Disability Services
- Neighbour, Community and Support Groups
What does it cover?
Cover for wrongful acts committed by the principals, partners, trustees, directors and officers of the association arising out of an error, misstatement, omission, negligence, breach of duty, breach of confidentiality, and mismanagement. Similar response to liability cover provided by Management Liability and Directors & Officers policies.
Cover for the same claims scenarios as above but is only triggered when the association has had to indemnify the insured individuals. It is reimbursing the association for these costs, whereas the above is directly covering the insured persons directly.
Cover for a wrongful act committed by the association which has resulted in a legal action where the association is named in the lawsuit.
Covers the association from alleged Employment Practices breaches, such as: harassment, discrimination, failure to promote/hire, bullying, wrongful dismissal etc.
This section provides cover for a range of crime related occurrences when there has been a direct financial loss. This can include employee fraud or dishonesty, third party crime, electronic and computer crime, etc.
Provides cover the association from an allegation regarding a breach of professional duty resulting in a financial loss. The Association could have involvement in handling of memberships, creating and managing curriculums, setting policies and guidelines, advice at seminars, newsletters, websites, that have in someway caused a third party sustain a loss.
A former employee who was made redundant commenced proceedings against the Association and manager alleging bullying, intentional infliction of emotional distress and wrongful termination. The employee further alleged that as a result, they had suffered depression and were unable to currently work due to their mental distress. The policy would provide defence costs and settlement costs (should the Association be found liable).
What limit of indemnity is adequate?
The limit is usually set depending on the budget and size of the Association. Insurer pricing is generally competitive and starts at a low premium with insurers offering capacity of up to $20M. As with any insurance policy, the limit should be discussed with your broker and suit the needs and exposures of the Association.
Information required to obtain quotations
- Completed Proposal Form
- CV of key board members
Additional information on coverage recommended for Not For Profit organisations can be found in our article here.
To discuss the insurance requirements of your Association or to obtain a quote, please contact us via the form below.