As an organization formed to elevate and typically educate those who work in your field, your professional association provides an important service. It might provide legitimacy through certifications, licenses or otherwise manage entry into the field, and it’s more than likely that you maintain standards as well. Professional associations also often have the important task of representing your profession in the eyes of the public and advocating for the interests of your members with vendors, politicians, regulatory bodies etc.
The structure and function of professional associations differ greatly across Canada, but one thing that unites them is their main purpose – to support their members. But these associations are entities unto themselves, and regardless of whether they operate for profit or not, they face risks that are similar to any enterprise.
Why do Professional Associations need insurance?
Professional associations need to carry appropriate insurance, just like businesses, due to the liability risks they face. The risks and hazards a professional association faces are similar to other entities and include liability around business operations, professional services, and other everyday liability risks related to general operations. Professional associations also face risks around education and certification specifically, if that’s a service you offer.
Professional Association Insurance
As a professional association, there are certain key coverages that are necessary to allow your organization to operate while significantly lowering risk. The following insurance applies to professional associations and should be considered:
1. General Liability – this type of insurance covers your association in the event that any third- party experiences bodily injury or property damage as a result of your operations.
2. Property Insurance – if your association owns a building or other physical property, this coverage provides protection against extreme weather like flooding, as well as against vandalism and theft.
3. Directors and Officers Insurance – if your professional association is governed by a board of directors, you need to have Directors and Officers Insurance in place. This protects the entity, individuals and their personal assets in the event a claim is brought against the board.
4. Errors and Omissions Insurance – this insurance provides liability protection if your association is involved in certification or other assurances to the public. If an error is made or a duty is breached, the association could be held liable. This coverage is essential in protecting the association from potential lawsuits and damages payments that could bankrupt it or significantly impair it’s ongoing ability to provide services for it’s members.
5. Cyber Liability – if your association maintains a website or hosts member files online, this coverage can protect you from data breaches or other losses associated with your digital assets/data.
Some of the risks involved with your professional association:
- Your association may face repercussions if someone you certify is later found to be unqualified.
- A decision made by your board of directors is found to be harmful to the members of the association, who sue due to impact it has on their respective businesses.
- Your member data is breached through a cyber attack.
Insurance coverage for a professional association is essential and must be carefully considered in conjunction with the specific aspects of the organization.
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