how to manage risk - florida...entitles you to the benefits of their insurance policy and will...
TRANSCRIPT
For Main Street Organizations
H OW TO
MANAGE RISK
Who We Are
National Trust Insurance Services, LLC (NTIS), is a for-profit subsidiary of the National Trust for Historic Preservation
• Created in 2003 to address the growing issues and concerns regarding proper insurance coverage for historic properties and for the organizations that work to maintain them.
• We specialize in finding ways to reduce your risks through insurance and mitigation methods, so your organization is protected both now and in the future.
Agenda
1 Insurance Coverages Your Organization Needs
2 Risk Management: How to Prepare
3 Questions
1 Insurance Coverages Your Organization Needs
Directors and Officers
General/Liquor/Event Liability
Volunteer Accident
Miscellaneous (Property, WC, Umbrella, Auto)
General/Liquor/Event Liability
Provides an organization coverage for claims arising from an Insured’s liability due to third party property damage or bodily injury (caused by negligence or acts of omission) during performance of his or her duties or business.
Coverages May Include: Liquor, Special Events
Directors & Officers Coverage
Protects the organization and it’s individual members from liability claims arising out of alleged errors in judgment, breach of duty, and wrongful acts related to the organization’s activities.
Coverage includes: Employment Claims, Personal Injury Claims, Libel & Slander Claims, Publisher Errors & Omissions Claims, Management Errors & Omissions Claims.
Typical D&O Claims Scenarios
• Solicitation of funds
• Personal injury
• Bankruptcy
• ERISA
• Anti-Trust
• Management decisions
• Alleged misuse of funds
• Employment law
• Civil rights
• Regulatory action
Volunteer Accident Coverage
Provides annual insurance to cover accidental medical expenses for volunteers who are injured while on the job, as well as coverage for accidental death and dismemberment.
Coverage includes: Applicable while participating in a scheduled, sponsored and supervised volunteer activity during a sponsored event of the Policyholder or its related organization and while traveling to and from covered activities as a group, under the supervision of the Policyholder or its related organization.
The most common claim related to Accident Medical Reimbursement occurs when volunteers are injured in a fall. While every fall cannot be eliminated, some slip and
fall hazards are more predictable. Consider variables in workplace conditions: When it’s icy, do everything possible to clear walkways, building entrances, and steps (including those on
vehicles) If a volunteer is assigned at another location, what is being done there to keep the area free hazards that might cause a fall?When working with children, it’s not uncommon for volunteers to be tripped accidentally by toys or the children themselves, both of which are below eye level. It is important to caution volunteers that they need to use more care simply walking around in such a setting.
A volunteer slipped and fell on the floor of a non-profit and fractured her hip. She sued the landlord who turned out to be an additional insured on the non-
profit’s insurance policy. The claim settled for $550,000, which included a Medicare lien.
Photo Credit: imgarcade.com
Miscellaneous Additional Coverages
• Property• Worker’s Compensation• Umbrella• Auto
2 Risk Management: How to Prepare
Contracts, Certificates of Insurance, Waivers and Hold Harmless Agreements
The “Three Legged Stool” of Risk Management
Contract(Indemnity Agreement)
Certificate of Insurance
Additional Insured
Why be on the hook for claims when someone else should pay? Help prevent your business from becoming the deep pocket.
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A Main Street hosts an annual farmer’s market and an out of town vendor accidentally knocks a tower of
crates on a few patrons– costing the Main Street $50,000 in medical bills.
The Main Street Organization:• Did not require the vendor to take responsibility for claims.• The Main Street did not verify the vendor’s insurance limits.• The Main Street was responsible for damages.
Photo Credit: Reuters
Every time you hire a contractor, enter into agreements for services or
products, or lease out a building or equipment, chances are you sign a contract. Whether formal or informal, contracts often include language that transfers responsibility for accidents.
The park in the example did not transfer their risk to the responsible party. They failed to protect themselves and were stuck with the responsibility connected with those incidents.
It’s important to include contract terms that shift the exposure to claims from you and your business. This is done by using a written indemnity or hold harmless agreement, and by having you or your business named as an additional insured on the other party’s insurance policy.
Stool Leg #1 - Contracts
Indemnity Agreements
A part of a contract where one party promises to pay for another party’s liability.
This means attorney fees and monetary damages if the claim was related in some way to the work performed under your contract. It should clearly state that the other party to the contract will indemnify and defend you and your business for liability which arises from a) that party’s negligence, and b) your company’s negligence related to the contract. This wording should be tailored to your organization to make certain that your business’s increased risk will be transferred to the other party to the contract.
Typical Indemnified Claims
Breach of warranty or representation
Breach of contractual obligation
Negligent of intentional misconduct
Bodily injury or property damage
Violation of intellectual property rights
Sample Wording for Insurance/Indemnification
Insurance
Vendor shall maintain adequate and sufficient insurance to cover all potential losses to the Client under this Agreement. The Client shall be a named as an additional insured under such policy(ies), with evidence of such insurance provided to the Client within 30 days of the signing of this Agreement. Vendor shall provide certificates of insurance listing Client, its directors, officers, employees, subcontractors, agents, volunteers and assigns as additional insureds, coverage to apply on a primary basis without contribution. All policies must contain a waiver of subrogation favorable to the additional insureds. Vendor’s insurance carrier shall agree in writing to provide the Client with thirty (30) days’ notice of cancellation or material change to coverage.
Sample Wording for Insurance/Indemnification
Indemnification
Vendor agrees to indemnify, defend and hold harmless Client, its officers, directors, volunteers, employees, contractors and agents, from any and all claims, losses, damages, liabilities, judgments, or settlements, including reasonable attorneys’ fees, costs and other expenses, incurred by the Client on account of any act, omission or breach of this Agreement or arising in any way from services performed by Vendor pursuant to this Agreement. Vendor remains liable for all damage or injury due to Vendor’s negligence, or the negligence of Vendor’s employees, contractors or agents.
Stool Leg #2 – Insurance RequirementsVendor will maintain in full force and effect during the term of this Agreement:
A. Commercial general liability insurance (including contractual liability coverage) on an occurrence basis for bodily injury, death, “broad form” property damage, and personal injury, with coverage limits of not less than $1,000,000 per occurrence;B. Auto liability insurance coverage all owned, non-owned and hired vehicles with coverage limits of not less than $1,000,000 per occurrence for bodily injury and property damage; (only needed if driving is part of scope of work; limits can be modified for individuals/small companies)C. Workers compensation insurance as required by law in the state where the services will be provided, including employer’s liability coverage for injury, disease and death, with coverage limits of not less than $1,000,000 per accident and employee;D. Umbrella (excess) liability insurance on an occurrence form, for limits of not less than $1,000,000 per occurrence; (need for less depends on scope of work)E. Professional liability, for limits of not less than $1,000,000 per claim (need is dependent on scope of work)F. Fidelity insurance on an occurrence form, for limits of not less than $1,000,000 annual aggregate (need is dependent on scope of work: only when vendor has access to customers' bank accounts, funds, payments, client records)
Stool Leg # 3 - Additional Insured Status:
This means your or your company are added as an insured on the other party’s insurance policy for claims that arise our of your contract with the other party. Being an additional insured entitles you to the benefits of their insurance policy and will directly protect you.
Other party names you and your business as an additional insured. The limits should be at least $1,000,000 per occurrence or accident and $2,000,000 in the aggregate The other party’s insurance policy will be primary to your business insurance policy
Liability Waivers
Will your waiver be enforced?• Conspicuous, clear, concise• Identify the specific parties being
released• Educate staff about the
importance/seriousness of waivers • May not protect against gross
negligence and/or recklessness
3 Questions?
Check out our website for more information: www.nationaltrust-insurance.org
Kevin [email protected]
410-547-3176
THANK YOU