associations > not_for_profit > not for profit insurance
Not for Profit Insurance

Accidents do happen and you need to be comfortable that you and/or your organisation are adequately protected against any potential liability to pay compensation as a result of the accident. Just because your organisation may be an incorporated body does not mean that you cannot be sued. The act of incorporation creates a separate legal entity that can be sued rather than the individuals who are committee or board members of an unincorporated organisation.

Whilst incorporation may provide your organisation with the ability to limit its potential liability (and you should seek legal advice on this issue), it doesn't mean that it cannot be sued, especially if negligence on the part of you and/or your organisation can be proven.

Therefore, just like any private or public company, a Not for Profit organisation should investigate what insurance it needs for its own unique activities and the best way of doing this is to seek advice from an insurance broker or an insurance company. The insurance broker has a duty to provide you with advice on a range of products available from the insurance market whereas an insurance company will offer you the opportunity to purchase its own products. Make sure that you are aware of what is excluded from the policy as well as what is covered.

As you will be aware, insurance comes at a price so you want to make sure that you purchase insurance policies that will adequately cover your organisation's assets and liabilities, without paying for unnecessary or inappropriate products. A Public Liability policy, for example, will cover your organisation for its liability to pay compensation to a third party (a member of the public) for personal injury or damage to their property happening as a result of your organisation's negligence. (It may not cover injury to volunteers carrying out activities of the organisation or members and guests of the organisation who are actually participating in the organisation's activities such as contact sports. In these circumstances, separate Personal Accident (Voluntary Workers) cover or Participation cover as an extension to the Public Liability policy may need to be purchased). A Fire and Perils policy will protect your organisation's own buildings, equipment and other contents against loss or damage caused by a fire, storm, malicious damage and other named perils.

Some of the types of insurance (this is only a sample) that you can purchase through an insurance broker or directly from an insurance company include:

This covers loss or damage to your organisation's building/s (if you own them or are responsible for insuring the building under your lease or other agreement) caused by fire, storm, rainwater, malicious damage, earthquake, windstorm (cyclone), explosion and other perils that are named in the insurance policy. The loss or damage must be unexpected and must be caused by a named peril for the policy to respond. Please note that flood is often not covered under Buildings and Contents insurance and if you need the cover, you should specifically ask the broker or insurance company if it is included in the policy.

This type of insurance provides cover against loss caused by misappropriation of funds and/or property by employees or committee members of the organisation. You may decide you do not need this type of insurance if you are comfortable that your organisation has adequate procedures in place to prevent this type of misappropriation.

As mentioned previously, a Public Liability policy will protect an organisation against its legal liability to pay compensation to a third party for bodily injury and/or property damage arising from an occurrence in connection with the activities of the organisation. The policy also covers legal costs associated with defending a claim for compensation against the organisation. It should be noted that a Public Liability policy will not pay claims for injury to a volunteer working for the organisation although this cover can be obtained through a Personal Accident policy.

The Public Liability policy will normally extend to also include Products Liability but it would be prudent to ask the broker or the insurance company if Products Liability cover is included, particularly if your organisation manufactures, sells or distributes products. Products can include, for example, food sold at a fund raising event and Products Liability cover will protect the organisation in respect of claims made against it should somebody become sick as a consequence of eating the food.

Personal Accident insurance for volunteers provides a monetary benefit in the event of accidental injury, disability or death which occurs whilst the volunteer is doing work for the Not for Profit organisation. The injury, disability or death must be caused by an accident, unlike life assurance, which covers death by any cause including, for example, heart attacks or strokes.
Personal Accident insurance can be extended to include a weekly benefit if the volunteer is unable to work as a result of sickness or injury.

This policy is a combination of Professional Indemnity and Directors' & Officers' liability insurance, designed to meet the needs of Not for Profit organisations. Each section of the policy will cover your legal defence costs as well as compensation and legal costs payable to the claimant (a third party) following an allegation of a "wrongful act" by you or your organisation in the course of your professional duty.

There are basically four sections to this policy:

• Professional Indemnity This section provides protection to the organisation or Association, its office bearers and employees, for claims that arise from any advice they give to third parties and members.
• Office Bearers This section provides personal protection to all office bearers for claims that arise from wrongful acts, committed whilst representing their organisation or Association.
• Association Reimbursement This section will pay claims on behalf of the organisation or Association when the organisation or Association has been named in a claim or circumstance.
• Entity Insurance This section provides protection to the organisation or Association itself where the organisation or association becomes legally liable for claims not covered under other sections of the policy. This is a key area of coverage for all organisations or Associations.

In Australia, this is a statutory insurance that is compulsory if your organisation engages staff under a contract of employment. It covers defined benefits under the Worker's Compensation Act applicable to the State of domicile of the employee (in Queensland this is known as Workcover) including lost wages and medical expenses incurred as a result of an injury in the workplace.

It is accepted that most members of the community and their families need personal insurances such as House, Contents or Car insurance. Through the Aon Personal Insurance “Gold” (API Gold) program, we have the opportunity to provide not only a value added benefit to your volunteers to consider, but cost effective insurance solutions such as:

• Premium discounts of up to 20%*
• Easy payment options, such as credit card and pay by the month – all at no extra cost
• Paperless claims
• 24-hour on-line access
• 24-hour emergency assistance help line

The premium discounts available to your volunteers of up to 20% are available on personal insurance products purchased online via www.apigold.aon.com.au.

For piece of mind, volunteers can be assured by the fact that Aon Personal Insurance is supported by the strength and experience of Aon - a global insurance broker, and CGU Insurance - part of Australasia’s leading general insurance provider.

Volunteers do so much for the community, so why not give them something back!

If you would like to find out more about offering API Gold to your volunteers, contact our Not for Profit team on 1300 309 797.

*The premium discounts reflect a discount off the standard Aon Personal Insurance base premiums. The premium discounts apply to new Aon Personal Insurance policies purchased on-line via www.apigold.aon.com.au. The 20% premium discount does not apply to Motor Vehicle Insurance policies. Motor Vehicle Insurance policies attract a 10% premium discount. Policies purchased via the Aon Personal Insurance Customer Care Centre do not attract a premium discount. This offer is subject to change without notification.

You need to be aware that an insurance company will calculate the premium they charge you for an insurance policy on the information that you give them about your organisation and the activities in which you participate. If you do not provide the correct information and there is a claim against the policy, the insurance company may have the right to avoid paying the claim depending on the circumstances.

You must also advise the insurance company or your broker if your organisation becomes involved in an activity that is outside the types of activities that you had previously notified the insurance company you were involved in.