Warning: preg_match(): Compilation failed: group name must start with a non-digit at offset 8 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 872

Warning: preg_match_all(): Compilation failed: group name must start with a non-digit at offset 4 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 846

Warning: Invalid argument supplied for foreach() in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 847

Warning: preg_replace(): Compilation failed: group name must start with a non-digit at offset 4 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 851

Warning: preg_match_all(): Compilation failed: group name must start with a non-digit at offset 4 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 846

Warning: Invalid argument supplied for foreach() in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 847

Warning: preg_replace(): Compilation failed: group name must start with a non-digit at offset 4 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 851

Warning: preg_match_all(): Compilation failed: group name must start with a non-digit at offset 4 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 846

Warning: Invalid argument supplied for foreach() in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 847

Warning: preg_replace(): Compilation failed: group name must start with a non-digit at offset 4 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 851

Warning: preg_match_all(): Compilation failed: group name must start with a non-digit at offset 4 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 846

Warning: Invalid argument supplied for foreach() in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 847

Warning: preg_replace(): Compilation failed: group name must start with a non-digit at offset 4 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 851

Warning: preg_match(): Compilation failed: group name must start with a non-digit at offset 8 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 872

Warning: preg_match(): Compilation failed: group name must start with a non-digit at offset 8 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 872

Warning: preg_match(): Compilation failed: group name must start with a non-digit at offset 8 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 872
Does Your Society Need Insurance? - FGS Wiki

Does Your Society Need Insurance?


Warning: preg_match(): Compilation failed: group name must start with a non-digit at offset 8 in /home/ens9/public_html/fgs/mwiki/includes/MagicWord.php on line 872
From FGS Wiki
Jump to: navigation, search
(Blanked the page)
Line 1: Line 1:
 +
[[Category:Strategies for Treasurers]]
  
 +
 +
== INTRODUCTION ==
 +
 +
Societies should consider a number of
 +
insurance plans to cover the risk of loss of
 +
society-owned property, protection against
 +
claims of injury by persons attending a society
 +
function, dishonesty protection, and protection
 +
of board members against certain law suits.
 +
Does your society need any of these types of
 +
insurance? The answer is “maybe.”
 +
 +
Insurance is meant to cover the financial
 +
consequences of unforeseen events. You
 +
should evaluate the insurance plans offered
 +
based not on the risk of such an event
 +
happening but on the consequence of not
 +
having the insurance. To think in terms of
 +
risk—such as the risk is low that a tornado
 +
will hit downtown Salt Lake City—is not
 +
wise. Risk is difficult to predict: after all, a
 +
tornado did damage downtown Salt Lake City
 +
in 1999. Instead, if you decide to turn down
 +
insurance, do so because the consequence of
 +
something happening will have little financial
 +
impact on your society. Let's look at some
 +
insurance plans in terms of risk and
 +
consequence.
 +
 +
 +
== COMPREHENSIVE GENERAL LIABILITY (CGL) ==
 +
 +
This policy will protect the society and
 +
members from actions brought against them
 +
from a third party for bodily injury or property
 +
damage. Bodily injury may come in the form
 +
of injuries sustained by a guest of the society.
 +
 +
An example is a speaker who, while
 +
presenting to your society, trips over the
 +
microphone cord and breaks an arm.
 +
Property damage may manifest itself as a
 +
claim brought against the society for alleged
 +
destruction to a facility in which a meeting
 +
was held. For example, while bringing a
 +
movie screen into the building for a society
 +
seminar, the volunteer accidentally smashes
 +
the screen into a glass door and breaks the
 +
glass.
 +
 +
In these two examples—bodily injury and
 +
property damage—the society and its
 +
members would be protected by a policy up to
 +
the limits of coverage, which are generally
 +
$1,000,000 per occurrence and $2,000,000 in
 +
the aggregate. In most cases the Comprehensive General
 +
Liability (CGL) policy will also include
 +
coverage known as medical payments with a
 +
limit of $5,000. This coverage is provided in
 +
the case of a minor injury that occurs to a
 +
guest or visitor to a society function and/or
 +
meeting and allows for a “no-fault”
 +
reimbursement of their medical costs up to the
 +
limit for this coverage part.
 +
 +
Another coverage part of the CGL policy
 +
concerns itself with personal injury and
 +
advertising liability. Personal injury is defined
 +
in the policy as “injury, other than bodily
 +
injury, arising out of oral or written
 +
publication of material that slanders or libels a
 +
person, invasion of privacy,” and other similar
 +
types of offenses. This would include a
 +
possibly libelous statement about an
 +
individual that is made in one of your
 +
publications.
 +
 +
The advertising liability section in the CGL
 +
policy is defined as “advertising injury caused
 +
by an offense committed in the course of
 +
advertising your goods, products, or services.”
 +
Of all the insurance, this is perhaps the one
 +
most important in this litigious society of
 +
ours. Perhaps it could be argued that if such a
 +
suit was brought and the plaintiff won the
 +
case, the assets of the society are so small that
 +
you would just go out of business and restart
 +
as a new society. But for most societies, their
 +
preference would be to have the insurance if
 +
the cost is not burdensome.
 +
 +
Check with your insurance agent to confirm
 +
that all the coverage described above is part of
 +
the CGL insurance you are buying.
 +
 +
 +
== PROPERTY LOSS ==
 +
 +
This protects you against loss of property
 +
owned by your society. This can include such
 +
items of property as general contents,
 +
furniture, fixtures, the society's use interest in
 +
tenant's improvements and betterments, and
 +
the property of others that is being held in the
 +
care, custody, and control of the society and
 +
for which the society has a responsibility.
 +
This definition includes a library consisting of
 +
books and manuscripts, which can be
 +
considered as “all other personal property
 +
owned” by the society. It is wise to insure
 +
these items on a replacement cost basis, which
 +
is the reproduction cost of an item without
 +
depreciation. Obviously, when dealing with a
 +
library of older books and papers, it is
 +
difficult at best to apply a reasonable value for
 +
the replacement of these items. One might
 +
wish to retain the services of a competent
 +
appraiser in an effort to establish values.
 +
In all cases, evaluate the consequence of the
 +
total loss. If you own $1,000 worth of books
 +
that are kept in a closet at the place that you
 +
meet, what would be the consequence to your
 +
society if they were stolen? If the answer is
 +
that your society would just get its members
 +
to donate the books again, then perhaps you
 +
do not need the protection.
 +
 +
In certain instances larger societies may own a
 +
building and for obvious reasons they would
 +
need to procure building insurance coverage
 +
on a broad perils basis to protect themselves
 +
from fire, vandalism, and the perils generally
 +
associated with what is known as an “all risk”
 +
policy. These policies do have exclusions; the
 +
most typical are earthquakes and floods.
 +
If your society's valuables are kept on some
 +
premises not owned by your society (as is true
 +
for many small and medium-sized societies),
 +
see if the owner of the premises has insurance
 +
that would cover the loss of your property on
 +
their premises. If not, it may even be possible
 +
to have a rider added to their policy that
 +
would cost less than your own insurance
 +
policy.
 +
 +
 +
== DISHONESTY PROTECTION ==
 +
 +
Most businesses today, whether for-profit or
 +
not-for-profit organizations, face the hazard of
 +
employees or volunteers committing acts of
 +
dishonesty. These usually take the form of
 +
misappropriation of funds or inventories.
 +
Since the vast majority of genealogical
 +
societies are both nonprofit organizations and
 +
have no employees, we are dealing with the
 +
activities of the volunteer treasurer or other
 +
members of the board of directors with access
 +
to money and bank accounts.
 +
 +
To evaluate the need for Dishonesty
 +
Protection, the board should ask itself if they
 +
are concerned about the treasurer running off
 +
to Brazil with the usual $123.45 in the
 +
treasury or the $11,000 conference seed
 +
money it contains once a year. The two most
 +
important assurances against this risk are:
 +
 +
  1. Know the person handling your funds.
 +
  2. Create safeguards to prevent an opportunity  for the misuse of funds.
 +
 +
It is worth noting that the principal reason for
 +
theft in these situations is not dishonesty but
 +
opportunity. If you have a treasurer who is not
 +
monitored (audited is the fancy word) on a
 +
regular basis, you are giving that person the
 +
opportunity to misuse the funds.
 +
 +
Term limits is another safeguard against fraud.
 +
If a person is going to be treasurer for only a
 +
brief period of time, let's say two years, there
 +
is a lower risk of fraud than with a treasurer
 +
who has assumed the role for life. Invariably
 +
when you read in the news media about fraud
 +
against a non-profit such as a church, the story
 +
says something like “A person who was a
 +
trusted bookkeeper for more than 25 years…”
 +
In this situation, the person had the
 +
opportunity to steal the money because of the
 +
long tenure in the position and the lack of
 +
audits.
 +
 +
 +
== DIRECTORS AND OFFICERS LIABILITY COVERAGE ==
 +
 +
This policy provides protection for the
 +
directors and/or officers who are accused of
 +
mismanaging the society. Examples of
 +
incidents that would be covered by this
 +
insurance are: sexual harassment claim against
 +
an officer, use of the society's funds in an
 +
alleged improper manner, and loss of taxexempt status due to improper acts.
 +
This is the coverage every society board of
 +
directors wants yet it is likely to be the most
 +
useless of the coverages. The main protection
 +
against individual directors or officers being
 +
sued is to incorporate your organization. The
 +
one exception would be if it could be proven
 +
that the officers deliberately used the
 +
corporate protection to perform some act in
 +
the belief they could not be individually sued.
 +
 +
There is a second reason Directors and
 +
Officers Liability (D&O) coverage is
 +
ineffective. The policy would likely not cover
 +
you for punitive damages; just real damages.
 +
This means that, if for some reason the courts did
 +
make the officers part of the suit and the
 +
plaintiff was awarded $10,000 in real damages
 +
and $1 million in punitive damages, the
 +
insurance would only cover the $10,000.
 +
Given that the cost for this insurance exceeds
 +
$500, and societies with as many as 200
 +
members have an annual budget of only $4–
 +
5,000, spending a significant portion of the
 +
society's annual income on D&O insurance
 +
might be grounds for a lawsuit that the
 +
officers are mismanaging the funds of the
 +
society. Only the largest of societies should
 +
consider this coverage.
 +
 +
 +
== CONCLUSION ==
 +
 +
All societies must evaluate the implication of
 +
not having Comprehensive General Liability
 +
insurance. This insurance protects against
 +
negligence on the part of your society that
 +
causes injury to a person or property. But
 +
property and dishonesty protection should be
 +
considered separately. The size, property
 +
owned, and net worth are some of the
 +
determining factors. Does Your Society Need Insurance?
 +
Page 4 FGS Society Strategies, Set IV Number 2
 +
Large societies will probably want property
 +
insurance to protect what may be thousands of
 +
dollars of property. Likewise, if your treasury
 +
typically contains tens of thousands of dollars,
 +
in addition to having proper auditing
 +
procedures, you might consider Dishonesty
 +
Protection.
 +
 +
Finally, if you have a surplus in your treasury
 +
every year, you might even want Directors
 +
and Officers Insurance to give your Board
 +
members peace of mind in the event they are
 +
made party to a suit brought against your
 +
society.

Revision as of 23:17, 13 August 2013

Personal tools
Namespaces

Variants
Actions
Navigation
Toolbox