Association Liability - What is it?

This is a form of errors and omissions coverage for the managers of a “not for profit” organisation’s affairs. It covers individual members whilst acting in their capacity as directors, officers, employees or volunteers, when performing in various roles to achieve the objectives of the organisation.

Coverage is triggered by a claim made against an individual alleging that while they were acting in this capacity that they did or failed to do something (committed what the policy calls a Wrongful Act) for which they could be held personally accountable. This means having to pay out of your own pocket for a mistake while performing a role, most likely voluntarily for a “not for profit” organisation.

While an organisation may be liable for the actions of its employees, most instead consist of volunteer workers and committee members who can instead be personally liable. Besides, do you want the organisation to also carry that financial impost when their funds could be directed better elsewhere?

Cover is similar in nature to policies maintained by or for the benefit of other professionals, such as lawyers, accountants, doctors, etc. And also to policies held by Directors and Officers with the additional benefit of coverage also extends to the organisation if named as a defendant in a lawsuit.

Who would want to claim against me?

Employees - allegations may include wrongful termination, discrimination, or sexual harassment

Volunteers- allegations may include failure to supervise others activities which resulted in harm to the volunteer

Members (players) and/or their parents- allegations may include failure to properly supervise, discrimination, denial of credentialing, sexual harassment, or any other dispute in which the member (player) believes caused harm to him or her

Competing clubs- allegations may include libel and slander or unfair trade practices

Organisation - allegations may include breach of your duty of care or your fiduciary duties (trusteeship of assets)

Outsiders- outside third parties who transact business or otherwise deal with the organisation may assert a claim against a director and/or officer if such outsider has been personally and directly harmed by the wrongdoing

The Government– there is so much legislation and regulations that you could get caught up in these laws.

Who is covered?

Past, present and future directors, officers, employees and volunteersare covered for the reasonable costs of defending themselves against claims alleging a wrongful act and their personal liabilities that they incur for their acts.

The organisation is also covered to the degree that it can or may be permitted to indemnify its directors, officers, employees and volunteers for its direct obligations under the club’s deed of indemnity.

What is covered?

“Wrongful acts" - which means any actual or alleged act, error, omission, misstatement, misleading statement, neglect or breach of duty while acting in their capacity as a director, officer, employee or volunteer and on behalf of the organisation.

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 

Being an Incorporated Association in Queensland

Model Rules of a Constitution

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