Trade associations are devoted to improving and promoting their industry, and they carry out an important role in furthering the interests of their members. However, like traditional businesses, conducting their work makes them vulnerable to a range of risks that could lead to expensive lawsuits. Here is a look at some of the commercial insurance coverages that can protect trade associations.
Directors And Officers Insurance
Directors and Officers or D&O insurance is one of the most important types of coverage that trade associations need. Many associations have boards that are run by member volunteers. Without this type of policy in place, directors’ personal assets would be at risk if a claim is made pertaining to their duties with the association. This coverage also protects member assets from being depleted should a claim or lawsuit be filed alleging wrongdoing by the directors and officers.
A D&O policy can shield trade associations against claims of financial mismanagement, such as waste of assets and unwarranted extensions of credit. It can also cover claims of negligence, such as failing to file annual reports or failing to verify facts in official documents before signing them. Other claims that could fall under a D&O policy include repeated absences from meetings and errors in judgment, such as misleading or false reports.
Securing this type of policy can also be helpful in attracting high-quality directors and officers as many professionals will not consider serving in this capacity without having insurance in place to protect their assets.
Professional Liability Insurance
Professional associations can face a broad range of professional liability claims, such as faulty research, grant administration errors, copyright infringement, marketing errors, and errors related to member certification and decertification.
For example, many trade associations publish newsletters that can expose them to risks. Improper vetting of articles may lead to suits alleging libel and other disparaging statements that would be protected by a professional liability policy.
Associations that offer education and training to their members are also vulnerable to suits related to certification errors in the event that they fail to process a certification correctly or on time or decertify members because they did not follow association rules.
The benefits offered to their members put some trade associations at risk of class-action lawsuits in cases where members believe a board member could be receiving a financial benefit from a deal. Another risk includes funding provided by associations for research related to the industry.
For example, if a grant payment is issued late, preventing research from being completed in time to meet a publishing deadline, a claim of grant administration negligence could be filed against the trade association. Professional liability insurance could cover the costs of such lawsuits.
Commercial General Liability Insurance
Commercial general liability insurance is another important policy that protects trade associations against third-party claims for a variety of risks, such as property damage, bodily injury, copyright infringement, and advertising mistakes. It can help to cover the legal fees should a third-party claim be made against the organization.
A commercial general liability policy that includes scheduled or broad events coverage is essential for trade associations that hold events such as fundraisers on a regular basis. Many event venues require organizers to have a certain level of coverage before holding an event .
Commercial Property Insurance
A commercial property insurance policy can protect the owned or rented property that a trade association uses for carrying out its work, as well as its physical assets, including the building, equipment, inventory, tools, and personal property on the premises.
Workers’ Compensation Insurance
Trade associations that have at least one employee are required in most states to carry workers’ compensation insurance. This is a type of no-fault policy that protects the trade association and its employees in the event of a workplace accident, illness, or injury.
It can cover the costs of medical expenses as well as partial lost wages and job retraining, in addition to shielding the trade association from any lawsuits related to employee injuries.
Cyber Liability Insurance
Trade associations that use computers and the internet for their work are vulnerable to technology-related risks. Commercial cyber liability insurance is useful for losses resulting from data breaches. For example, it can cover the legal fees and expenses involved in notifying affected parties after a breach occurs, in addition to monitoring their credit information for a specified time. It can also help cover the costs of recovering data that has been compromised and repairing computer systems that may have been damaged in an cyberattack.
Contact The Commercial Insurance Professionals
Get in touch with the professionals at CI Solutions to find out more about our commercial insurance offerings for trade associations. As a full-service, independent insurance intermediary, we offer high-quality insurance solutions that can protect trade associations in all industries.