Association Liability & Not For Profits

Association Liability insurance is a form of Directors & Officers liability insurance aimed specifically at Associations.

Why office bearers need expert help:

These days it’s not just directors of large public companies who are exposed to personal liability for breaches of the duties they owe. Office bearers of incorporated associations and other not-for-profit organisations are also at risk. A simple act, error or omission can be enough to spark a claim against you or your association.

The exposures:

The cost of defending a claim, and any damages and costs awarded against you. Such claims could be brought as a result of professional services provided by the association to its members, or could be based on an allegation of a duty you owe in your capacity as an office bearer.

• The cost of preparing for and being represented at an inquiry that you are required to attend because you serve as an office bearer.
• Pecuniary penalties imposed on you that arise from you being an office bearer.
• A claim against you by another office bearer or employee, that arises from an employment related complaint.
• Liability whilst serving as a director of a not for profit organisation.

The exposures faced by your association:

In addition to the legal risks described above, the assets of the association are exposed to:

• theft or fraud by office bearers or employees.
• the cost of investigating theft or fraud by office bearers or employees.
• the cost of appointing an accountant to respond to a tax audit by the ATO.

Types of claims you or your association could face:

• breach of professional duty.
• breach of fiduciary duty.
• defamation.
• breach of the Trade Practices Act, and other statues.
• occupational health and safety proceedings.
• infringement of intellectual property rights.
• breach of confidentiality.
• allegations of illegal or improper conduct.
• wrongful dismissal, discrimination or harassment claims from employees.

What usually isn’t covered?

This policy is not a Public Liability policy and excludes bodily injury and property damage. A separate policy is required for this cover.

Consideration should be given to taking out a Voluntary Workers policy to cover injuries suffered by volunteers under your supervision. This can provide you with peace of mind and also protect your public liability program in the event that a volunteer is injured and sues the Association. I have attached some voluntary workers claims examples for you.