Trade associations are a vital part of protecting and promoting the common interests of those operating within a specific industry, maintaining and developing industry standards, and offering members services and products. However, in their efforts to further the interests of their industry, trade associations face a broad range of risks. In addition to the risks faced by any type of organization, there may be specific risks related to the trade association’s unique line of work. Therefore, having insurance that offers comprehensive protection is essential for protecting the association, especially from third-party liability claims.
For most trade associations, essential coverage includes three main components: liability, workers’ compensation, and cyber liability. Third-party liability claims can be among the most expensive types of claims raised against trade associations, so this is one area where it is worth investing in the maximum protection offered.
How Insurance Protects Trade Associations Against Third-Party Liability Claims
Trade associations typically purchase insurance packages that contain policies aimed at their specific concerns. Here is a look at some of the most important components.
General Liability
A comprehensive general liability insurance policy protects trade associations from a broad range of third-party liability claims and general liability claims. Outlined below is a closer look at some of the common categories of third-party liability claims these policies can address.
Third-party Property Damage
General liability policies can help to cover the costs if someone damages another party’s property while carrying out work for the association. This can pay for repair or replacement costs if the association damages someone else’s belongings.
Bodily Injury
Third-party bodily injury claims can be very expensive. If, for example, a person visiting your trade association’s office trips on some loose flooring and becomes seriously injured, a general liability policy could cover the incident.
Professional Liability
Outlined below are some of the third party liability claims professional liability policies can protect against.
Certification Errors
Trade associations often provide their members with training and education that can lead to certification. These certifications can boost a person’s resume and open up job opportunities, and errors in the certification could spur a lawsuit.
For example, if a certification was processed incorrectly or a member was decertified because they did not follow the association’s rules, it could result in legal action. Professional liability could help cover settlements, defense costs, judgments, and witness fees in such cases.
Grant Administration Errors
Some trade associations offer grants to fund research that is related to their industry, and while this is generally done with the best of intentions, it does make trade associations vulnerable to liability risks if the process is not carried out properly.
The trade association could, for example, fail to get a grant payment out in a timely manner and compromise a researcher’s opportunity to get their findings published in a journal. This could lead to lawsuits claiming negligence in grant administration.
Newsletter Liability
Trade associations that publish newsletters should be aware that they face risks if articles they print are not properly vetted. For example, they may be sued for libel or defamatory statements contained in the article. Professional liability offers protection for this type of claim.
Class Action Lawsuits
Another area where professional liability insurance can help is in protecting against class action lawsuits. These are sometimes brought against trade associations because of certain benefits they offer members, such as discounts.
For example, if it is discovered that a board member’s relative is connected to a retailer offering savings to members, this could lead to concerns that the board member may be receiving financial benefits from the deal, thereby spurring a class action lawsuit.
Other Types of Insurance for Trade Associations
Here is a look at some of the other types of insurance trade associations should consider.
Workers’ Compensation
In most states, associations that have at least one employee are required to obtain a workers’ compensation policy to cover workplace accidents, injuries, or illnesses. This type of policy will help with the costs of medical expenses, partial lost wages, hospital visits, and job retraining. It can also shield the association against lawsuits related to employee injuries.
Cyber Liability
Cyber liability offers protection for certain losses arising from data breaches that cause sensitive information to be exposed. It may cover legal fees, costs of notifying affected parties and monitoring their information, recovering compromised data, and fixing damaged computers.
Reach Out To The Trade Association Insurance Specialists
CI Solutions offers trade associations customizable coverage to protect against a broad range of risks. Get in touch with our experienced commercial insurance brokers to find out how we can keep your trade association safeguarded with an insurance package that is suited to your needs and budget. Call our friendly commercial insurance brokers today at (703) 988-3665.