Liability Risk Management and Protection for Non-profits

8/7/2019 Liability Risk Management and Protection for Non-profits

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www.notationsonnonprofits.com

LiabilityRiskManagementandProtectionForNon-ProfitGroupsGenerally,allnon-profitorganizationshavethesamegoalinmind,toprovideservicesatlittle,tonocost,thatwouldnototherwisebeavailabletomanypeople.However,whether

your

organization

does

animal

rescue

or

youth

sports

all

non-profits

face

the

samepotentialforliabilityeverydayandaroundeverycorner.Liabilitiesthatcanattimesbeboundless,unknownandnumberingfromthehundredstothethousandsofdollars.Asifthatwasntenough,theseliabilitiescanarisenotonlyfromtheactionsoftheorganizationitself,buttheactionsofvolunteersaswell.WhatToDo,WhatToDoIfyouremembernothingelse,rememberthis.Anorganizationcannevergettoocomfortableinitsoperations,regardlessoftheprotectionsputinplace.Ithelpstohavewaivers,contracts,andpolicies(ohmy)inplace.Butwithcase-lawconstantlyevolving,andnewlawsconstantlybeingenacted,whatworkedyesterdaymaynotnecessarilyworktoday.Forthatreasonanydocumentsorproceduresputinplaceshouldbelivingandbreathing,adaptingasthenecessityarises.Moreover,auditsshouldbedoneonaregularbasistoensurethatthesedocumentsandproceduresarestilleffective.Andspeakingofeffective,thebestwaytoensureeffectivenessistostartatpointAandunderstandexactlywhatthepotentialexposuresare.Afterall,puttingsomegenericpolicyinplacewonthelpifitisnotcateredpreciselytowhatitisyourorganizationdoesandsituationsyourorganizationfindsitselfin.Forexample,whattypeofliabilitycouldyourorganizationpotentiallybeonthehookfor?Therearegenerallydifferentlevelsofliabilitythatnon-profitscanfaceincluding;(i)vicariousliability-adoctrinethatimposesliabilityupononepersonfortheactions,orfailuretoact,ofanother;(ii)directliabilitywhereanorganizationisliableforitsownactions;and(iii)strictliability-adoctrinethatimposesliabilityregardlessofwhetherthereisanintenttobenegligent.Soaskyourself,whatactivitiesdoyour

ErinMcClartyEsq.2011Allrightsreserved


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volunteersengageinthatyourorganizationcouldbeheldvicariouslyliablefor?Doyouengageinanyactivitiesthatcouldresultinstrictliability?Understandingthevariousfacetsofliabilityiswhatwillbestenableyourorganizationtobepre-emptiveandprotectitselfagainstthem.IsThereNoHope?Whenlookingatallofthistogether,thepossibilitythatanon-profitorganization,anditsmembers,couldbeheldliableinacivilorcriminalactionisquitelarge.Seeingthis,manypeoplebegantoavoidworkingfor/servingonorganizationstoavoidendingupincourt.Consequently,manystatesbegantoadoptsomeformofimmunitydirectedatnon-profitswherestatesprovidecertainlevelsofimmunitytoparticularclassesofvolunteersandotherssuchasdirectorsorofficers.It'simportanttolook,ifyouhaventalready,atthestatutesforyourstatewhendeterminingyourorganizationslevelofimmunity.Alsolookintogoodsamaritanlawsaswell.DevelopingAPlanOfProtectionDontbedeceivedthough.Theseimmunitylawsgenerallyprotectvolunteers.Non-profitsaresomewhatprotected,butontherarestofoccasions.Inmostinstances,non-profitscanstillbeheldresponsibleforanyinjuriesthatoccurorlawsthatarebroken.Consequently,withtheapplicabilityofimmunitybeingsosmall,thereisstillaneedfornon-profitstodevelopasolidplantoaidinminimizingrisks.Asahead-start,herearefourtipstokeepinmind:

Obtain

Insurance

Coverage

-With

the

new

competitive

market,

organizations

areabletoseekhigherlimitsandmorepersonalizedcoverageoptionstobetterfitthetypeofservicesprovided.Non-profitInsuranceAllianceGrouphasagooddepositoryofthosewhoissueinsurancefornon-profitsandguidancecanbefoundonGuidestarandNorthwestNon-profitResources.

CreateVolunteerHandbook/GuidelinesEstablishingasetofguidelinesthatworkwithinthescopeofyourstatelawswillhelpyoubettermanageyourriskforliability.

TalkWithOtherNonprofitOrganizationsManyestablishedorganizationscanofferinsightonyourownpotentialweaknessandprovenstrategiesforriskmanagement.

TakeTheRiskManagementTutorialwww.nonprofitrisk.orghasa30-minutetutorialthatwalksyouthroughassessingyourrisklevelaswellashelpyouestablishaneffectivemanagementplan.

Attheendoftheday,everynon-profitorganizationneedstohaveaplaninplacetolimitliabilityandprotectthemselvesfrompotentiallawsuits.Notonlydoesthishelptoprotecttheorganization,thosetheorganizationseekstoserveandthosewhohave

http://www2.guidestar.org/rxa/news/articles/2006/insurance-advice-for-start-up-nonprofits.aspx?articleId=1035http://www2.guidestar.org/rxa/news/articles/2006/insurance-advice-for-start-up-nonprofits.aspx?articleId=1035http://www2.guidestar.org/rxa/news/articles/2006/insurance-advice-for-start-up-nonprofits.aspx?articleId=1035http://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www.sfcard.org/GoodSamaritanLaws.pdfhttp://www.sfcard.org/GoodSamaritanLaws.pdfhttp://www.sfcard.org/GoodSamaritanLaws.pdfhttp://www.sfcard.org/GoodSamaritanLaws.pdfhttp://www.sfcard.org/GoodSamaritanLaws.pdfhttp://www.sfcard.org/GoodSamaritanLaws.pdfhttp://www.nonprofitrisk.org/library/state-liability.shtmlhttp://www.nonprofitrisk.org/library/state-liability.shtmlhttp://www.nonprofitrisk.org/library/state-liability.shtmlhttp://www.nonprofitrisk.org/library/state-liability.shtmlhttp://www.nonprofitrisk.org/library/state-liability.shtmlhttp://www.nonprofitrisk.org/library/state-liability.shtmlhttp://www.nonprofitrisk.org/http://www.nonprofitrisk.org/http://www.nnr.org/prod02.htmhttp://www.nnr.org/prod02.htmhttp://www2.guidestar.org/rxa/news/articles/2006/insurance-advice-for-start-up-nonprofits.aspx?articleId=1035http://www2.guidestar.org/rxa/news/articles/2006/insurance-advice-for-start-up-nonprofits.aspx?articleId=1035http://www.insurancefornonprofits.org/http://www.insurancefornonprofits.org/http://www.sfcard.org/GoodSamaritanLaws.pdfhttp://www.sfcard.org/GoodSamaritanLaws.pdfhttp://www.nonprofitrisk.org/library/state-liability.shtmlhttp://www.nonprofitrisk.org/library/state-liability.shtml


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decidedtoserveaswell.Althoughthisallcanadmittedlybecomecomplex,anyonecanatleaststartcreatingandimplementingariskmanagementplanandthenconsultwiththeappropriateexpert.


Documents

Liability Risk Management and Protection for Non-profits