INSURANCE and LIABILITY for ORGANIZERS/OFFICERS

Steve ConardIOTA Conference

October 2013

Does IOTA Need Insurance?

• IOTA owns no property, and has little in the way of assets– Is there really any need for insurance?

• It has been recommended to me by my financial advisor not to risk serving in any official capacity for a 503c that does not carry insurance– Is there risk to the officers of IOTA?

Types of Non-Profit Insurance

• Looking over a list of types of insurance for non-profits, there are only two that seem at all applicable to IOTA– General liability– Directors and Officers liability (D&O)

General Liability

• General liability insurance covers claims alleging bodily injury or property damage caused by an accident

• Includes (limiting it to those possibly applicable to IOTA):– Injuries to volunteers– Injuries to guests at events– Injury caused by products the insured sells or manufactures– Damage to property not owned by the insured or in its

possession

D&O Liability• D&O insurance covers intentional acts by the directors and

officers, including a host of things that I can’t imagine IOTA having a problem with

• However, from Marlandnonprofits.org:– “Many people ask: Do we really need D&O insurance? Aren’t charities

immune from liability? Charities are immune from many types of liability under Maryland law. However, Maryland's immunity laws, while good, may not protect your organization and its board members, staff and volunteers from all potential liabilities. Moreover, immunity from liability doesn't mean that you are immune from being sued. If you are sued and don’t have D&O insurance, you will be forced to incur expenses defending your organization and its directors, employees, and volunteers. One of the principal reasons for buying D&O coverage is that it will pay for the costs of legal defense.”

Cost of Insurance

• My wife is treasurer of a 503c animal rescue group in Maryland– That group has had insurance for about the past 5

years after another local rescue group had a close call with an injury at one of their events

– Other than the obvious (animal bites), the other big reason for getting insurance was liability from volunteers driving their cars while “working” for the group

• The insurance is about $350 per year