Your trade association is like a community, with a deep reliance on the protection it offers as members continue to provide products or services. As a result, maintaining a strong portfolio of insurance coverage is non-negotiable for a successful, active association that operates with confidence. E&O insurance for trade associations is an essential element of this portfolio, but many groups do not adequately consider the risks and coverage gaps that their insurance protection may include.
Conducting an insurance risk review is one accessible way to do the important work of identifying problems before they truly materialize. Here are the basics of an insurance risk review to help your trade association identify its insurance weaknesses and address them appropriately.
Essential Takeaways
- Trade associations have insurance needs that differ from those of corporations, so all decisions should be filtered through the association’s specific structure and risks.
- An insurance risk review helps map coverage and how it overlaps with existing behaviors, identifying gaps in protection.
- A review involves a deep investigation of the association, from its internal guidance and past trends to its preparedness to address upcoming difficulties.
Why Trade Associations Should Never Skip an Insurance Risk Review
An insurance risk review is a thorough examination of the association’s entire composition and practices. Without spending the time digging into the specifics of the organization’s decisions, structure, and behaviors, it is impossible to understand where a latent risk may lie until someone attempts to use insurance and finds it lacking.
Changes in member services, programs, or even regulations can alter the association’s risk profile, making insurance that previously functioned well no longer sufficient. If new members enter, the entire association’s risk profile changes.
Understanding the Specific E&O Angle
Trade associations are not corporations, and so their insurance protection should not follow the same form. Errors & omissions exposure for an association is often tied to credentialing, certification, continuing education, compliance courses, and even lobbying or advocacy. Relying on boilerplate insurance protections may not adequately provide coverage for these angles.
Common Gaps Addressed by E&O
Most trade associations have a general insurance policy, so the governing structure may assume that such coverage is sufficient for many incidents that may also fall under E&O. However, general liability may not be enough.
Some of the most common areas in which E&O assists that may fall outside the scope of an association’s general liability policy include:
- Claims due to inaccurate guidance or professional advice circulated within the association
- Failing to offer certification programs properly
- Mistakes when interpreting regulations
- Patently incorrect advice offered about issues such as operations or safety
During an E&O risk review, associations frequently find that they are missing valuable protections such as fiduciary liability, media liability, or cyber liability.
Mapping Coverage With Real Activity
Because E&O insurance can address commonly overlooked risks, conducting an insurance risk review can help you identify gaps and see where your protection needs to be strengthened. The first, and most important, step is to map your association’s coverage to actual activities occurring within the group. This means things such as:
- New initiatives that have begun since the last time you chose insurance
- Expansion into new areas (e.g., digital)
- Collection or distribution of sensitive information
- New partnerships (e.g., vendors, sponsors)
- Changes in how your association is structured or governed
- Amendments to bylaws
How to Conduct an Insurance Risk Review
If you are ready to start with your risk review, begin by gathering the knowledge noted above. What has changed since the last time you looked at your insurance? This can help you understand where special attention is needed as you go through the steps.
- Start at the top: Interview department heads to get updates on what is occurring and where vulnerabilities may lie.
- Take inventory: Look at the association’s published materials, such as guidance documents, to see if they pose any risks you have not accounted for.
- Look back: Evaluate current trends in the association’s complaints or inquiries, which may indicate an underlying issue that needs to be addressed.
- Compare: If you have similar associations in your area, compare your coverage to theirs (e.g., limits, deductibles) to see if you deviate significantly, and if so, consider why.
- Look forward: Just as you examine trends in the past, do not forget to look to the future. Emerging risks such as AI, changing regulations, and more may prompt you to adjust how you use your insurance or build your protection profile.
Every trade association differs, from the industry in which it operates to its composition and governance structure. This is why working with insurance professionals versed in helping trade associations is invaluable.
Get the Right Errors & Omissions Insurance for Your Trade Association
If it is time to consider new insurance options, conduct an insurance risk review to see whether your errors & omissions insurance is working for or against you. The professionals at CI Solutions can help you review areas of potential risk and create insurance coverage to address such uncertainty. Contact CI Solutions to receive personalized insurance assistance!