Government contractors are often among the most adaptable workers, adjusting quickly to new rules in compliance, procurement, security, and oversight. The trade associations that serve them must be equally adaptable; your members rely on you to provide impactful advocacy, education, stability, and continuity of service. Thus, selecting the right trade association insurance is essential for properly safeguarding the contractors who rely on you.
However, choosing the best insurance is not always a clear-cut decision. Here are five questions government contractor organizations should ask before committing to a policy.
Essential Takeaways:
- Any insurance package should be customized specifically for the particular rigors of government work.
- Organizations should establish that all relevant members, including leadership, are covered under the policy they select.
- Digital threats are a significant but often overlooked element of insurance protection.
- Minimum coverage amounts require careful calculation to avoid overpaying or underinsuring.
- The agency you choose matters just as much as the policy; select one that responds proactively to changes rather than reacting after the fact.
1. Is the Insurance Specifically Customized for Government Work?
Government contracting is exclusive among other types of contractor work due to the inclusion of potentially classified information, tasks with regulatory implications, and partnerships with other prime and subcontractor systems. The insurance chosen to protect government contractors in your trade association should address the risks that are specific to this field.
For example, make sure that your insurance addresses issues such as allegations of negligence, data mishandling, or errors in compliance requirements. These gray areas may not be covered automatically, so always read the policy carefully. Standard trade association insurance without government work in mind may leave you vulnerable.
2. Are All Members Covered?
Government contractor organizations must focus on covering more than just the contractors themselves. Directors, executives, former federal officials, and more may also be necessary members of the teams and committees managing the work. Without the proper insurance, your association may quickly find itself embroiled in financial or regulatory hot water.
Review your policy to see what is covered in this area. Notably, coverage includes committee activities, partnership decisions, and antitrust.
3. What Extent Does the Insurance Cover Digital Threats?
In government, work is not just done on the ground. Many facets of a project will likely rely on technology and data to facilitate or complete work. From storing data to publishing research or even maintaining a list of members, security becomes non-negotiable. With potentially sensitive information, a single slip could result in significant liability.
Any government contractor insurance policy should include strong protections against digital threats. Look for inclusions for member data breaches, ransomware, and direct attacks. Check whether coverage extends to third-party platforms such as hosting providers or communication systems.
4. How Much Coverage is Necessary?
One of the biggest struggles any trade association must address when seeking insurance is determining how much coverage is appropriate. Too much coverage, and you will be paying more than necessary for protection you will not use. Too little, and your policy may not fully cover a situation when you need it to.
To determine the appropriate number, compile information on multiple areas relevant to your contractor organization. This includes:
- Total annual revenue, and how much of it you should or want to protect
- The sensitivity of the data you host
- Any event revenue or sponsorship volume
- The replacement cost of essential tools and infrastructure
- The average cost of defending against regulatory or compliance lawsuits based on your specific area of practice
Many government contractor organizations elect to carry coverage of at least $1M, though some choose $5M or even more based on their specific situation. This is one area that should not be left to guesswork; choose an insurance agency that will provide personalized recommendations.
5. Does the Insurance Agency Act Proactively or Reactively?
The insurance agency that you select matters just as much as the types of limits of the coverage you choose. In government work, the outlook changes frequently, and insurance must adapt to keep you protected.
Consider whether the team you choose will assist reactively. If your policy only sees changes or recommendations after essential shifts in government compliance or regulations have already occurred, you could be left with dangerous temporary gaps in protection. Instead, choose an insurance representative who is on the pulse of the industry to anticipate upcoming difficulties and make proactive recommendations on how to avoid them (or adapt to them if they are unavoidable).
Get Customized Trade Association Insurance for Your Government Work
If you manage a government contractor organization, your members rely on you to provide insurance coverage that truly protects them. Contact CI Solutions to build a customized insurance strategy that allows your contractors to operate with confidence.