Monday, April 11, 2016

Sharing Risk..30 Years Later

I want to begin this entry with a quote from a white paper on the status of liability insurance in the nonprofit sector.

" was discovered that there is little that individual nonprofit organizations can do to moderate the impacts of insurance industry cycles. The best solutions for dealing with the crisis are those which involve the collective efforts of many nonprofit organization, and it is those types of solutions towards which much of this paper is devoted. Risk sharing is given special emphasis because of its relatively strong potential for providing both short-term and long-term assistance to the nonprofit sector..."

Taken from Nonprofit Organizations and Liability Insurance: Problems, Options, And Prospects written by Pamela Davis, the report developed into a career manifesto for Ms. Davis. There are three things I really love about this excerpt:

1. It was published in California in 1987. Almost 30 years later and the same trends exist in our industry with respect to nonprofits.

2. It lead to this:

3. I think they are doing well financially:

I actually have had the pleasure of speaking with the Founder of the NIAC, Pamela Davis a few years back. NIAC had received some attention north of the border. She couldn't remember precisely, but believed it to the from the Co-Operators.

She explained to me that they were initially funded with $1,300,000 in capital with 400 nonprofits participating in 1989. As of year end 2014, they have over $83.6 million in revenues. Wow!

I'll end this entry with one final quote from Pam's report.

"Shopping around for a new broker every year may put an organization at a disadvantage....[H]aving a broker that is familiar with an organization's risk history and extent of exposure may reduce the likelihood that (the) organization will be the one to get dropped."
See you next week.

The Need For D&O Insurance

I thought i'd share this article on the types of things that can go wrong when people in the Non-Profit world have disagreements over how the NPO should be run.

While the events that have unfolded are unfortunate it highlights the need to protect board members from suits claiming negligence while acting on behalf of the organization.

It also shines a light on the need for a more complex insurance structure including Commercial General Liability. As claims for defamation could be interpreted to be excluded from a D&O policy, a GL would respond to certain allegations.

TheStar Prank calls, lawsuits and mystery pizzas: Mississauga Humane Society in chaos