Liability Risk Management and Protection for Non-profits

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  • 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

    ErinMcClartyEsq.2011Allrightsreserved

    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.

    ErinMcClartyEsq.2011Allrightsreserved