What it is
Nonprofit Improper Sexual Conduct and Abuse coverage provides protection for actual and alleged claims of various types abuse by your employees and volunteers to third parties.
Three Reasons Why Your Nonprofit Needs this Coverage
- Background checks aren’t foolproof: You do your best to screen your employees and volunteers but the screening isn’t always perfect and sometimes people who aren’t 100% honest slip through the cracks.
- You can’t directly supervise everyone at every moment: Employees and volunteers often have unsupervised contact with clients.
- People don’t always know they are acting inappropriately: Sometimes people have the best intentions and act in a caring way but it is not perceived that way by the third party.
This Could Happen to Your Nonprofit
Day Care Molestation:
An independent daycare contractor was certified by a nonprofit. A child placed in the daycare center was molested by the teenage grandson of the daycare contractor. Litigation ensued and the nonprofit’s records showed all appropriate site visits and background checks had been carefully done. Based on case law that insulates a nonprofit from the unforeseen criminal acts of a third-party and their strict adherence to protocols, a court ordered dismissal that was upheld on appeal. No damages were paid on behalf of the nonprofit, but almost $150,000 in defense legal costs were incurred.
Assault by Employee:
A client of the nonprofit’s safe harbor house was sexually assaulted by one of the nonprofit’s part-time gardeners, who had a mild mental illness. Investigation revealed that the gardeners were supposed to be closely supervised and his absence from the crew could not be explained. Based on medical records that reflected little physical trauma but a psychological reaction, the claim was eventually settled at a mediation for $50,000 with $11,000 in defense costs.
Improper Relationship with a Client:
A food delivery volunteer for a meals on wheels program engaged in a consensual sexual relationship with one of the female clients he delivered to. When this was discovered, he was reprimanded when he should have been terminated, The client filed a lawsuit claiming she was coerced into the relationship in order to obtain food. Following protracted legal discovery the case settled for just over $100,000. Defense costs were $50,000.