ASSOCIATION LIABILITY Broker Information. innovative insurance protection

Transcription

1 ASSOCIATION LIABILITY Broker Information innovative insurance protection

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3 BROKER HIGHLIGHTS We Know Non-Profits: Through our strong links with the social service and community sector Rosser Underwriting has, since 1996, developed specialised insurance products designed to meet the needs of non-profit organisations. Current legislation and an increasingly litigious environment require greater compliance by all non-profits. Coupled with greater employee knowledge and interest regarding their rights in the workplace, non-profits require first class and comprehensive liability insurance. Rosser Advanced Association Insurance offers up to the minute protection against the cost of defending and settling a broad range of allegations that may be made against an organisation by regulators, employees, clients, members, and others. Our policy provides the deep-pocket to meet these unbudgeted costs allowing the continuation of operations. Policy Features: Crime and Employment Practices Liability cover included as standard Professional Indemnity cover including one automatic re-instatement Access to complimentary legal advice Costs and Expenses solution to address Bridgecorp/Steigrad decision Internet Liability cover included as standard Costs of challenging adverse tax or charitable status decisions Ability to include cover for Employers Liability, Statutory Liability and General Liability Outside Executives cover included Broad Insured Person definition including employees, independent contractors and volunteers Ability to cover directors and officers of subsidiaries even if these are for profit companies Publicity cover to prevent or mitigate damage to reputation Accidental Death Benefit covering the death caused by injury of an Executive of the Insured Defence Costs for Registration Decisions Expert claims handling by experienced staff Contact for claims: Website: Phone: 0800 TO ROSSER ( ) newbusiness@rosser.co.nz Policy wordings, proposal forms and all other product information may be found on our website.

4 WHAT CONSTITUTES A NON-PROFIT ORGANISATION? Broadly, a non-profit organisation is one without owners seeking to provide a return to shareholders. In practice non profits take a wide range of forms including: Incorporated Society An organisation of members with a common interest that associate together for a mutual and lawful interest other than the pursuit of profit. The interest is most often a sport, hobby or community related purpose. Charitable Trust Board Is a body (either a Trust or an Incorporated Society) registered under the Charitable Trusts Act Importantly, especially for a trust, by becoming a charitable trust board the organisation acquires a legal identity independent of the trustees or members. Charitable Company A limited liability company accepted by the Inland Revenue Department as charitable. To be accepted, the company must either be owned by existing charitable entities with appropriate restrictions in the company constitution or any distributions made by the company are made only to charities accepted as such by the IRD and the distributions comply with the IRD guidelines. Unincorporated Club or Group An informal organisation where members have combined together to further a non-commercial interest. Such groups operate in a collective fashion but the organisation itself has no legal standing and because of this is uninsurable under the Rosser Combined Association policy. Target Risks/Classes Non-profit Organisations including trade and professional associations, social service and counselling organisations, sport and recreation clubs and associations, foundations and charities, federations, community groups, religious groups and churches, service clubs and chartered clubs, chambers of commerce and business development organisations, body corporates, private schools, charitable companies and statutory bodies.

5 COVERAGE DETAILS Management Liability Protects both Executives and Employees against claims alleging a wrongful act, error or omission in the governance of the Association. Typically this type of claim is both complex and costly. To meet these costs the policy provides for advancement of defence costs thus protecting the Association s cash flow. Association Reimbursement In many cases an Association has, in its rules or trust deed, a clause indemnifying Executive members against costs they may personally incur as a result of an action against them alleging a wrongful act, error or omission in connection with their duties on behalf of the Association. If the Association has indemnified the Executive as a result of such a claim the policy may step in to reimburse the Association. Professional Liability Professional Liability cover will respond in the event the insured faces legal action for a failure in providing advice or in discharging a professional responsibility to a client or customer. Those who perform professional services are held to a higher legal standard of behaviour than the general population. The Association Policy covers Executives, Trustees, and Employees for actual or alleged Breaches of Duty, acts, errors or omissions, misstatement, misleading or deceptive conduct, infringement, libel or slander committed unintentionally, breach of confidentiality, or omission in the performance or failure to perform professional services. Employment Disputes The Association Liability Policy includes cover for employment disputes and personal grievances arising from wrongful acts in connection with the employment or termination of an Employee. These increasingly common claims come in many forms, from allegations of harassment, discrimination, to all types of personal grievance such as constructive dismissal or unjustified termination. Crime The Association Liability Policy provides cover should your organisation suffer a financial loss as a result of dishonest or fraudulent acts committed against the Association. In the case of such an event, Crime cover assists in protecting or restoring the financial position of the organisation. Unlike traditional Fidelity cover, our Crime section extends to include financial loss resulting from theft and fraudulent acts committed by third parties as well as employees. Loss is also extended to include not just money, but also physical property. Crisis Loss Provides cover for an unforeseen event that is likely to cause significant impact on the revenue of the Association and pays the costs of hiring a Public Relations Consultant to minimise the impact of the event on the organisation. An experienced Consultant, engaged at this time, can greatly assist the resolution of a crisis with a minimum of adverse publicity and disruption to the Association. Examples of a crisis loss include: Loss of a major grant, the sudden unexpected death of an Executive, the loss of a major customer, contract, or credit facility, Employee workplace violence, a breach of computer security, or a man-made disaster. Costs and Expenses In the event that a claim arises that exceeds the policy limit, invoking a charge over the policy in favour of the claimant, defence costs are advanced via a separate Costs and Expenses cover ensuring that the Insured does not have to fund their own defence.

6 Publicity This extension allows the Association to incur costs in designing a media campaign to prevent or minimise damage to the reputation of an Executive of the insured Association as a result of a claim. Accidental Executive Death Benefit In order to assist the Association, the Accidental Death Benefit provides a payment of $100,000 in the unfortunate event of an Executive dying as the result of an injury. Registration Decisions Provides defence costs arising from a challenge to a decision by the Association not to register or to remove a person as a member of a professional body. Internet Liability Covers loss due to claims made against the insured alleging: transmission of a computer virus, unauthorised material use, and defamation over the internet. OPTIONAL EXTENSIONS To make insurance easy for your organisation, we offer insuring agreements that extend the core Association Liability Policy. These three options are Statutory Liability cover, Employers Liability cover and General & Products Liability cover. If you choose additional covers, the Insurer will write the policy as a comprehensive and integrated package offering cover to you under separate insuring agreements. Statutory Liability Offers protection in the event of a breach of Acts of Parliament with the exception of the Arms Act 1983; Aviation Crimes Act 1972; Crimes Act 1961; Land Transport Act 1988; Proceeds of Crime Act 1991; Summary Offences Act 1981; Transport Act 1962; Transport (Vehicle and Driver Registration and Licensing) Act The Insured can choose a Limit of Indemnity of $500,000, or $1,000,000 depending on their requirements, or the can apply for a higher limit of indemnity where required to meet their needs. This extension is becoming more relevant in today s legal environment. It covers Defence Costs, compensatory damages, and Penalties awarded in a judgement or by negotiated settlement. Employers Liability Offers protection in the event of a claim by an employee for compensation for work related injury not covered by ACC. The Insured can choose a Limit of Indemnity of $250,000, $500,000, or $1,000,000 depending on their requirements, or they can apply for a higher limit of indemnity where required to meet their needs. General Liability & Products Liability General Liability offers protection for bodily injury, property damage or loss of use of property as a result of property damage, and personal injury. Products Hazard covers personal injury or property damage arising from the Association s products while in the possession of others. The Insured can choose a Limit of Indemnity of, $1,000,000, $2,000,000 or $5,000,000 depending on their requirements, or they can apply for a higher limit of indemnity where required to meet their needs.

7 ASSOCIATION ASSET INSURANCE Through our Advanced Business policy, we offer Material Damage and Business Interruption cover to provide protection against loss or damage to an Association s contents, plant, stock, buildings and other assets. CLAIMS EXAMPLES Professional Liability (a) A professional body produced a brochure for its members; some unintentional libellous comments resulted in a major defamation claim by a third party. In conjunction with AIG, settlement was reached in order to avoid a lengthy trial. Management & Association Liability (a) Executives of an Industry Association were called to attend a formal enquiry into fair trading. They were not found to be at fault but incurred legal fees for their representations of $4,500 with the consent of AIG. (b) An Association was called before a complaints review tribunal to answer malicious allegations. Legal costs of $28,900 were incurred with the consent of AIG to defend the claims. Employment Practices Liability (a) A former employee alleged wrongful dismissal against the Association and lodged an action with the Employment Relations Authority (ERA). This was defended in court in conjunction with AIG. The ERA found in favour of the former employee, awarding damages and costs against the Association. With the addition of the $38,000 in legal costs required to defend the claim the total costs covered by the policy amounted to close to $80,000. (b) An action was taken against an Association by two former employees alleging a breach in the Association s advertising of employment positions. In conjunction with AIG a $36,000 settlement was negotiated to achieve timely and final resolution of the matter. Legal costs incurred in reaching this resolution amounted to an additional $3,400. Crime (a) An office bearer of a small Association could not account for the deficit in the organisation s accounts. On investigation it was found that an employee had stolen at least $16,000 over a period of twelve months, the accounts were accidentally destroyed in a suspicious fire and external auditors called in to create new accounts discovered the shortfall and alerted the Association. Upon notification, AIG stepped in to cover the loss in excess of the retention. (b) A part-time employee of an insured Association was found to have made fraudulent electronic transfers and written fraudulent cheques in her own favour while working for the Association and for another organisation. The employee admitted theft of $320,000 over a 24 month period in order to fund a gambling addiction. The combined loss was calculated at over $400,000. The Association was fortunate in having a Rosser Association Liability policy that responded to this type of loss. A limit claim was paid.

8 PO Box 9521, Waikato Mail Centre, Hamilton 3240 E I info@rosser.co.nz P I (0800 TO ROSSER) Disclaimer: Cover is underwritten by AIG Insurance New Zealand Limited. The description of coverage contained in this document is a summary and is for illustrative purposes only. The coverage is subject to terms and conditions outlined and certain restrictions, limitations and exclusions contained in the policy of insurance. In the event of any conflict between the descriptions of coverage in this document and the policy of insurance, the provisions contained in the policy of insurance will govern. This document is accurate as at September AIG Insurance New Zealand Limited has an A (Strong) insurer financial strength rating given by Standard & Poors.