What it is
Nonprofit professional liability insurance provides coverage for claims and lawsuits associated with your miscellaneous non-profit professional activities. This would include activities such as teaching, counseling, consulting, and related activities. It is typically not meant to replace errors and omissions coverage for professionals like accountants and lawyers and it does not provide any medical malpractice coverage.
Three Reasons Why Your Nonprofit Needs this Coverage
- Professional Services are not black and white: While you might think you are providing the correct professional services in the most professional manner, others may not and this conflict can cause a claim or lawsuit.
- People don’t share everything: Counseling or consulting with others on what to do or how to behave can backfire if you are not given all the facts of a particular situation upfront.
- Teaching is subjective: What and how you teach information can be misinterpreted, especially by sensitive parents or special needs groups.
This Could Happen to Your Nonprofit
A nonprofit provided advice to the elderly regarding government subsidies for home improvements. A senior made repairs to his home based on certain advice that turned out to be inaccurate and made a claim against the nonprofit for the cost of these repairs. The claim was settled for $41,000 and the defense costs were minimal
Battery by Teacher:
One of the students in a nonprofit school for disabled and difficult students began acting out and needed to be physically restrained. It was subsequently learned that the teacher had not correctly followed take-down procedures, but injuries were minor. The parents retained an attorney and we were able to resolve the claim for a very modest $12,000 to be placed into a college trust fund. No litigation expenses were necessary.
Lack of Disclaimer:
A support group for Alzheimer’s patients provided a page on their website describing a recommended exercise plan but there was no disclaimer to consult a physician before trying the exercises. A member of the support group was injured while doing the exercises and requested the nonprofit pay her medical bills. The bills, as well as a small settlement of $10,000, was paid. The website page was taken down. Legal fees were $25,000.