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

I Wannacry over Petya

Just as our businesses avoided or got over WannaCry, the name given to the recent Ransom\ware, there's a new attack following close behind. It appears it is exploiting the same vulnerability as Wannacry. The malware responsible is widely thought to be a version of Petya. This latest  ransomware has already crippled Ukrainian government departments, banks, power distributors and transport networks. Now apparently it has spread to other high-profile victims such as a British advertising firm, a French construction materials giant and one of the largest pharmaceutical companies in the world. Australia is unlikely to avoid it this time, with Cadburys and TNT having announced they have fallen victim. the Australian staff of DLA Piper, a global law firm, has apparently been locked out of IT systems after Petya impacted one of its overseas offices.   The ransomware continues to spread and it’s far from over. The Assistant Minister for cyber-security Dan Tehan is calling the fresh attack a "wake-up call" and the Prime Minister's cyber security advisor Alastair MacGibbon has warned against paying ransoms for Petya, urging businesses to instead back up their data to "avoid being a victim in the first place". So it is now time for you to manage this risk effectively.

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What cost to me after a Cyber attack?

It does very much depend on the type of attack that has been made on your systems or Web site. However, below are examples of some of the areas you will spend money. How much? How long is a piece of string?

Have you budgeted for the following Expenses in managing your Cyber Risk?

Payment of a ransom? (Maybe a cheaper solution to get your system back temporarily)

data recovery and data rebuilding (IT consultants and data recovery contractors),

Loss of reputation on the business (You will need Crisis Managers, Public Relation consultants, Staff communications, clients and other stakeholders, marketing and advertising),

Various Accountants and consultants’ fees needed to measure and prove the loss

Managing the recovery – particularly to mitigate breach of privacy or confidentiality of client information and informing all of them who are affected by a breach how you are dealing with it (mandatory breach reporting requirements)

Lost Sales due to this Business Interruption (particularly when ability to generate online sales has been affected),

additional costs incurred to maintain business operations or mitigate sales losses – hiring a more specialist firm to deal more quickly with being off air

Cover these expenses with a Cyber Risk Insurance policy. Ask us how?

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