December Newsletter

Back to Basics: Directors and Officers Liability and Employment Practice Liability Risk Management Tips.

Directors and Officers Liability Insurance, also known as D&O, covers individuals who serve on the boards of nonprofit organizations. Individuals who serve in such areas can be held legally liable for activities that arise from the activities of the organization or the financial claims which result from their decisions. Generally, board members are responsible for the governance of the organization and can be held personally liable for decisions that fail to meet their responsibilities. D&O can be considered one of the most important coverage a nonprofit carries because it insures current and past board members and is often a requirement for potential new board members.

There are no standard policy forms for D&O coverage. Each insurer writes their own form and can have substantial differences among insurance carriers (insurers). When looking at the policy, nonprofit organizations should read the form carefully so that the scope of insurance is understood. For example, most insurers use a claims-made trigger, which insures claims that are initiated during the policy period (date of claim determines coverage not date of act), while some insure claims arising out of activities during the policy period. A nonprofit should also examine the definitions of keywords that are listed in the policy to understand the scope of coverage. For example, “insured” and “insured individuals” usually includes the board members (past, present, and future),  but some carriers also include committee members, spouses, volunteers, and legal representatives.

Many insurance carriers that write D&O for nonprofits will also include Employment Practice Liability (EPLI). The most common types of Employment Practice Liability claims are the following: sexual harassment, racial and gender discrimination, defamation, failure to accommodate, and improper employee classification. Claims for improper employee classification has been on the rise. Some carriers will provide defense for improper employee classification but back pay or penalties owed to the employee are not covered by any D&O policy form (wage and hour issues).

Board Members and Nonprofits should consider the following to help protect themselves against Employment Practices Liability claims:

  • Make sure that Employee handbooks are in compliance with the law and that the company strictly adheres to the policies stated in the handbook.
  • Open communication with employees and make sure that all supervisors are adequately trained
  • Adopt anti-discrimination and anti-harassment policies and make sure that employees understand that such behavior will not be tolerated.
    • If there is a complaint, make sure the organization does a thorough investigation promptly and takes the appropriate action.
  • Be sure that employees are classified correctly
    • Exempt vs. Nonexempt
    • Independent contractors

This is not an exhaustive list of what board members and Nonprofit administrators should consider in regards to risk management. Consult with your HR representative and/or Employment attorney to check if handbooks are in compliance and if there are other risks that the organization needs to address.

If you have questions regarding Directors and Officers Liability or would like a quote, please contact us. We are here to help.

*This is article is for informational purposes and not to be construed as legal advice.

Tips to Reduce Holiday Party Liability for Employers

With the holidays approaching, attention is now turning to celebrating with family, friends, and coworkers at the company holiday party. Many organizations are in the process of planning the festivities and various liability issues need to be addressed when organizing a party. Incidents are more likely to occur if alcohol is involved. Employers should be concerned with the possible repercussions from intoxicated guests. For example, liability can incur from the following: drunk driving accidents, underage drinking, discrimination claims, premises to liability, workers’ compensation (for falls), and injury to third parties.

Below are some guidelines organizations should consider for planning and managing company holiday parties:

  1. If hiring a third party vendor, verify that they are licensed, bonded, and insured (regardless of function). Request a certificate of insurance and make sure that they have adequate coverage. Ask your attorney or broker what coverage that vendors and your organization need to be sure that there is adequate coverage.
  2. Contract- after hiring the third party vender, obtain a signed contract that will outline the functions and services the vendor will provide. Make sure that the contract is as specific as possible to the event, verify there is a hold-harmless clause (in the event of a vendor-related injury), and have your attorney review the contract before signing.
  3. Serving alcohol- If your organization plans on having alcohol served at your company party, be sure to hire a bartending service that insures its employees against liquor- related liabilities. The bartending-service staff will pose specific liability risks, so it is important that only the bartender service handle drinks and check IDs. Hosts should never pour or mix alcohol, this can increase personal liability risk. If there is a guest who appears to be intoxicated, be sure that they are cut off and that they do not drive themselves home. Hosts should consider appointing a trusted party attendee to help monitor the guest’s alcohol consumption as the host will have to pay attention to other activities.
  4. Be sure that walkways and paths are accessible and clear, to prevent slips, trips, and falls. Walkways should be lighted and signs should be posted to notify guests to watch their step.

These are just a few tips to consider to ensure that the party is safe and fun for the guests involved. Be sure to check with your attorney for any contracts or liability concerns. Also, check with your insurance broker for special events liability coverage. If you have any questions, or would like a special events quote, please contact us we are here to help.

We hope that everyone has a safe and happy holiday!

*This article is intended for informational purposes only and not to be construed as legal advice.

Risk Management Special Event Tips

Risk Management Special Event Tips

“By failing to prepare, you are preparing to fail.” ~ Benjamin Franklin

Planning for events, fundraisers, and office parties should include the following basic risk management practices.

1.  Each event should have a Special Event Risk Management Plan. If you fail to plan, you run the possibility of injury to participants, employees, volunteers and property.

2.  Record keeping is critical to controlling risk. Events usually require pre-event inspections, contracts, insurance and post-event evaluation. Keep accurate records of the following:

Planning for events, fundraisers, and office parties should include the following basic risk management practices.1.  Each event should have a Special Event Risk Management Plan. If you fail to plan, you run the possibility of injury to participants, employees, volunteers and property.2.  Record keeping is critical to controlling risk. Events usually require pre-event inspections, contracts, insurance and post-event evaluation. Keep accurate records of the following:

~Risk Management Plan ~Staff/Volunteer applications and training records ~Copies of permits, licenses and certificates
~Emergency Evacuation Plan ~Contractor Agreements and proof of all contractors Insurance (liability and workers comp)
3.  Develop an Event Safety Checklist. An event safety checklist serves as a guide to the many issues that should be considered when planning an event. The following are things to consider when creating your event safety checklist.
  • First Aid/Communication–  Mobile communication between: event personnel, first aid and security
  • Staff, Volunteer and Contractors– Background Screening, Training with records kept, Copy of application
  • Permits, Licensing and Registration– Make sure to obtain proper City Permits and Liquor License
  • Fire Prevention– Make sure site has been inspected by local fire department.
  • Parking Facilities– Should be convenient and well-lighted.
  • Seating – Sufficient seating and inspection of seating area. Are seats well maintained? Is lighting adequate? ADA accommodations?
  • Food Safety – Adequate refrigeration, storage, and heat for proper food handling. If food is catered, make sure to obtain certificate of insurance verifying general liability and worker’s compensation coverage is in place.
  • Alcohol Safety– Adequate training and understanding of your policy regarding serving alcohol. Required identification, wristbands, and stop serving alcohol at least 1 to 2 hours before end of event. Make alternative transportation available. Verify Liquor Liability coverage
  • Amenities– Adequate toilet and hand washing facilities, Adequate trash disposal, and a secure Lost and Found area.
  • Emergency Procedures– Staff and volunteers trained on emergency procedures. Clearly posted Evacuation route.
  • Security– Crowd Control is important and security should be trained on how to handle potential problems. For larger events, a security firm may be necessary.
  • Clean Up– Clean Up Crew should continually survey entire area including bathrooms, kitchen and eating area to remove slip & fall hazards.
  • Independent Contractors/Vendors: Including Security, Entertainment, Caterers, Bartenders, Party Rentals, Parking attendants, Janitorial, etc., should provide you with proof of their Liability Insurance adding your organization as an additional insured. Independent contractors should also sign a hold harmless agreement protecting your organization. If contractors or vendors use their employees for your event, obtain their worker’s compensation insurance certificate.
  • Insurance/Legal– Review coverage for event with insurance broker. Obtain certificates of insurance from all Vendors, Contractors, and Co-Sponsors. Obtain signed participant waivers if appropriate.  Legal should review all contracts, waivers and rental agreements.

This is a brief summary and does not include all areas of risk assessment. Each event is unique and the event safety check list should be thoughtfully designed to plan and address the specific risks associated with your event.

Call us for more information if you are interested in Special Events Liability Insurance Coverages. We are here to help!


*This is for informational purposes only. Contact your attorney regarding legal matters.

Risk Management tips for your Volunteer Program

Organizations that engage volunteers in their operations should take special care to manage the risks associated with volunteer service. The following risk management strategies can help minimize the risk of volunteer service in your organization and maximize the benefits that volunteers bring to an organization:

  1. Use a volunteer application form to collect information from anyone who wishes to volunteer at your nonprofit. The application should be reviewed and checked for references. If the volunteer is providing direct services to your clients or vulnerable populations (i.e. children, elderly, disabled), a screening procedure should include criminal history background checks and reference checks.
  2. Obtain the volunteer applicant’s permission to verify any and all information on the application.
  3. Use a Volunteer Agreement to set forth the terms of the volunteer’s position in the organization. The volunteer agreement should be customized and based on the work that the volunteer will perform for the nonprofit.
  4. Provide an orientation and training program to make sure the volunteer thoroughly understands his responsibilities and its limitations. The orientation program should also include a grievance process that provides the volunteer information on how to express dissatisfaction or concerns within the organization.

If you have any questions feel free to call us.  We are here to help.
*Always consult with your attorney to review all agreements.

Think Twice Before Adding that Additional Insured!

Every day we receive a request from at least one client requiring a certificate of insurance for an “Additional Insured”. When we ask why the certificate is needed, the usual response has to do with a new funding source or mortgagee contract, lease agreement, special event agreement or rental requirement.

What many clients fail to realize, however, is that every time you add an additional insured on to your General Liability coverage, you are sharing your liability limits with the additional insured. In other words, if a covered liability claim is filed by your additional insured, it is your limits that are decreasing in order to provide the liability coverage to the additional insured.

“Additional Insureds” represent the cost of doing business. The explosive growth in the requests for “Additional Insureds” stems in large part from the nature of our litigious society. When collaborating with other organizations, make sure they carry their own liability coverage and negotiate agreements in which each entity is required to carry appropriate liability limits. If you are not in a situation where the “Additional Insured” requirement can not be negotiated, then consider increasing your own liability limits so your organization has ample liability protection. We recommend a commercial umbrella policy to protect against a catastrophic liability loss. Your attorney should also advise you as to appropriate agreements or waivers that can help limit your organizations liability exposure.

With regard to Special Event Collaborations, the vendors you hire may not be covered under your liability policy. To protect your organization make sure that every vendor and independent contractor provides the appropriate certificate of insurance and endorsement. You can also have contractors sign Hold Harmless agreements as a part of your risk management plan. Again, have your attorney review all agreements.

Make sure to review your liability policy and let us know if you have any questions. We are here to help.

This is intended for informational purposes only and should not be construed as legal advice.

Protect Your Organization: No Fun Until The Waiver Is Signed

Is your organization planning a field trip or camping trip? Perhaps a trip to a museum or amusement park? Does your organization participate in a youth sport program? As a part of your planning process it is a good idea to create a waiver for your participants to help protect your organization from liability. Nonprofit Risk Management Center offers the following tips to consider for careful waiver drafting.

Risk Management Tips:

  • Use a proper title—Always use the term “Waiver” or phrase “Waiver and Release of Liability” as the title of your form. Never use a misleading title such as “sign-up sheet.”
  • Keep it simple—Limit the purpose and content of the waiver to your request that a parent waive the right to sue for injuries suffered by their child while participating in a program or activity sponsored by your nonprofit. Waiver language buried in a longer document covering a multitude of topics increases the likelihood of disfavor by a reviewing court.
  • Be truthful and tell it like it is—Make certain that your waiver contains no fraudulent statements or misrepresentations. For example, don’t indicate that participants may inspect your equipment and facilities if there is no opportunity to do so. Don’t tell parents there is no insurance for the event, if, in fact, there is.
  • Clearly describe the specific activity in which the participant will be involved.
  • Don’t use one waiver for multiple activities
  • Note and describe inherent risks—Include a separate paragraph in the waiver alerting the participant to the inherent risks of the activity. Draft a representative list of inherent risks associated with the specific program or activity covered by the waiver.
  • Note the special risks pertinent to the activity, outdoor/indoor location, or type of facility. Remember that your nonprofit is in the best position to describe the terrain, conditions, physical fitness required, etc., as well as the dangers or unpleasant conditions associated with the activity.
  • Include an assumption of risk statement that affirms the participant’s voluntary participation. For example: “I acknowledge and accept the inherent and special risks associated with hiking Big Mountain and certify that I am voluntarily participating in the hike on June 10th.”
  • Use readable type —While it’s okay to use boldface, underline and italics to highlight key terms, don’t make the mistake of putting important or lengthy sections in ALL CAPS, WHICH ARE HARD TO READ.
  • Don’t promise a safe environment or safe experience —Although you should do your best to provide a safe and enjoyable experience for participants, it’s never wise to promise safety. WHY? A reviewing court may regard a promise of safety as an express or implied warranty, or evidence that any harm suffered by a plaintiff participant must have resulted from gross, rather than ordinary negligence.
  • Make the waiver section of the document clear—Ensure that the waiver is clearly drafted and applies to injuries arising from inherent risks or from the nonprofit’s ordinary negligence.
  • Remember “who” and “what” —Reference which parties seek protection and refer to the negligence of the parties. Some states require that the word “negligence” appear in an enforceable waiver.

Careful waiver drafting is an important part of protecting your organization from liability. Consult with an attorney for questions and review of your waiver.

If you are a Baker, Romero and Associates client, you have access to Nonprofit Risk Management’s Center Portal. We are here to help with your insurance and risk management needs.
*Intended for informational purposes only. This is not be construed as legal advice.




Back to Basics – Special Events

Special Events and Fund Raising sometimes involve activities outside the scope of an organization’s operations. Therefore, it is important to evaluate the costs associated with a special event in order to identify problems and then manage them appropriately and efficiently.

Developing a comprehensive safety checklist can help in planning your event or fundraiser. Part of this checklist should include a Special Events Insurance Review with your insurance broker.  Keeping proper records will help in identifying and controlling risks. Events usually require inspections, contracts and insurance for the event.  Having the appropriate agreements in place will go a long way toward a successful event.

Your Safety Checklist should include the following items:

First Aid/Communication Policy

* Mobile communication between event personnel, first aid and security

Permits, Licenses and Registration

* Food Handling/sales permits

* Liquor Licenses/permits obtained


* Sufficient number, type and handicap accessible

Food Safety

* Adequate refrigeration, storage, heat and prep areas

* Licensed/certified food handlers

Alcohol Safety

* Adequate Training for serving of alcohol

* Cut Off Time for Serving Alcohol at least one hour prior to end of event

* Required identification, wristbands

* Make alternative transportation available

Fire Prevention

* Check fire detection and suppression systems

* Train personnel on use and response

Staff and Contractors

* Background screening

* Copies of applications and resumes

Call us if we can be of assistance with your Special Events Insurance or if you would like a Complete Special Events Checklist.  We represent the leading insurance carriers for Special Events Liability Coverage. We are here to help with all of your insurance needs.

This is for educational purposes only.