Association Liability

What is it and why do you need it?

The Scenario – yes it was an honour when members of your organisation asked if you could sit on their committee.  You knew it carried great responsibility. They are depending on you to make appropriate decisions for the organisation. 

They chose you because they felt you had the skills to assist in supervising the organisation to continue forward, to grow and prosper and deliver the services that the membership expect.

 But what if you made a mistake? What if one of the other members of the committee made a mistake and you were included in with them? Would you be personally liable? Would the organisation protect you?

The answer is that the law provides that under given circumstances, directors, officers, employees and/or volunteers can be held personally accountable for their actions. These individuals can be held accountable for failing to act in accordance with the conduct in line with the duties owed to the members who put you there.
 

Therefore an Association needs Financial Protection for its directors, officers, employees, and volunteers and there are two methods by which an organisation can provide this

  • Indemnification.
  • Insurance

There is of course a third method – do not be on a committee at all!

Indemnification or Insurance – the issues

Statutes permit non-profit corporations to indemnify their directors and officers against loss incurred as a result of certain types of claims. Such indemnification does not provide protection in all instances.

Plus the organisation may not have sufficient financial resources with which to pay the losses and defence expenses.  Therefore most non-profit organisations purchase Association Liability insurance.

While there is a financial outlay buying insurance, it is a much cheaper solution compared to the consequences. So we strongly recommend considering the protection of an Association Liability policy.

Who can help?

An insurance broker's role is to act as your representative and work in your interests, seeking the best cover at the best price for you with their skill, market knowledge and experience. Call a good one.

Call CPR –Experts who will save you 

What is an incorporated Association?

Association Liability - What is it?

Association Liability - Claims Examples

Association Liability Proposal Forms

Association Liability Policy Wordings

Latest News

Summer catastrophe bill over $500 million

Insured losses for the four catastrophes declared over summer have gone above $550 million, according to the Insurance Council of Australia. 

There was a bit of a “sharp rise in value” of losses with the Great Ocean road bushfires that hit Victoria over Christmas. Insured losses from the Victorian bushfires now stand at $110 million from 527 claims, compared with $88 million one month ago. Rob Whelan, CEO of the ICA, said that the clean-up operation in the state is well underway with at least 15 sites cleaned up so far by contractors. Insurers can only commence rebuilding once each site has been cleared of debris, including asbestos.  Also the extremely steep terrain is presenting significant challenges, but insurers are determined to rebuild homes in the shortest time possible once the design and planning approval process is completed.  

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Hot summer leads to more claims

Insurance claims have so far exceeded $515 million this summer. Unfortunately they are likely to increase further as the country continues to deal with bushfires and severe storms. The Insurance Council of Australia (ICA) said the figure is made up from four catastrophes. These include three major bushfires in Pinery in South Australia, Victoria's Great Ocean Road and in Yarloop in Western Australia. Then there was also the Sydney storms and tornado in December.  Insurers were expecting this to be a highly dangerous summer. The predictions were for a heightened bushfire risk in exactly the areas that have suffered bushfires. It is still only the middle of  summer. The world has also experienced the hottest year on record since 1880. With more evaporation of land and oceans, combined with more mositure in the atmosphere creating more storm activity and then a greater volume being dumped somewhere else on the planet, it is unlikely these events will reduce into the future.

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