1. U.S. Rotary Club & District Liability
Insurance Program
Timothy A. Lundell
District 5170 Trainer
Courtesy of Peter W. Griffith CPCU, ARM
District 5340 Insurance Chair
4. Resources: Websites
Insurance Information Portal
• www.locktonportal.com/sites/rotary/resources
Username: [as provided]
Password: [as provided]
Insurance web page on www.rotary.org
• www.rotary.org/en/Members/GeneralInformation/Insurance
• Type “Insurance” in search box on www.rotary.org
5. Resources: Broker & RI Risk Mgmt
Lockton
• Toll Free:
1-800-921-3172
• E-mail:
rotary@lockton.com
RI Risk Management
• E-mail:
insurance@rotary.org
Availability:
• Monday – Friday, 6:30 am – 2:30 pm, Pacific Time
6. INSURANCE COVERAGE
* Nothing in this presentation shall be construed to extend,
alter, vary, or waive any of the provisions of the actual
insurance policies.
8. Coverage – GL Insurance
What is it?
• Third Party Claims of Bodily Injury & Property
Damage Against Insured
Subject to policy terms & conditions
KNOWLEDGE CHECK:
Anyone who is not considered
an insured. Usually refers
Who’s a 3rd party? to someone who is not
a Rotarian or Volunteer.
9. Coverage – GL Insurance
Who’s covered? Who’s Insured?
• Rotary Club
• Rotary District
• Rotary Club Foundation*
*If designated
• Rotary District Foundation*
criteria is met
• Interact Club
• Rotaract Club
• Rotary Community Corp.
• Certified Youth Exchange Organization
• RYLA
• PETS
Only U.S. Rotary entities!
10. Coverage – GL Insurance
Who else is covered? Who else is insured?
• Rotarians
• Volunteers
But only KNOWLEDGE CHECK: liability for acts within
with respect to their
theA Rotarian has a hernia while on behalf of a
course and scope of their duties
Rotary Club on District.
working or a Club project’s
construction site and receives
medical care. Is there coverage?
There’s no coverage when a Rotarian or volunteer
No.
gets hurt or has their personal property damaged.
11. Coverage – GL Insurance
Policy Period:
• 1 July – 30 June
Policy Limits:
• Up to $7,250,000 per occurrence
• That includes $250,000 self insured retention
KNOWLEDGE CHECK:
Would a Club have to pay a deductible
when there’s a claim? Nope.
12. Coverage – GL Insurance
Liquor Liability
Non Owned & Rented Auto Liability
• This is EXCESS coverage
• Does NOT provide coverage in Mexico
KNOWLEDGE CHECK:
Does this insurance cover a caterer
hired to serve alcohol at our event?
No!
13. Coverage – D&O/EPL Insurance
Why EPL?
Why
What is it? D&O?
• D&O - Claims Against Directors & Officers for Alleged
Wrongful Acts
• EPL - Employment and Membership Claims
Subject to policy terms & conditions
Does not cover bodily injury or property damage
(GL Insurance)
14. Coverage – D&O/EPL Insurance
Who’s covered? Who’s Insured?
• Rotary Club
• Rotary District *If designated
• Rotary Club Foundation* criteria is met
• Rotary District Foundation*
• Interact Club
• Rotaract Club
• Rotary Community Corp.
• Certified Youth Exchange Organization
• RYLA
• PETS
Only U.S. Rotary entities!
Same list as GL insurance!
15. Coverage – D&O/EPL Insurance
Who else is covered? Who else is insured?
• Director
• Trustee
• Officer
• Rotarian
• Employee
• Committee Member
But only with respect to their liability for acts within
the course and scope of their duties on behalf of a
Rotary Club or District.
16. Coverage – D&O/EPL Insurance
Policy Period:
• Will be same as Rotary Year, 1 July – 30 June
Policy Limits:
• Up to $2,025,000 per claim
• That includes $25,000 self insured retention
KNOWLEDGE CHECK:
Does the Club or Club officer have to pay a
deductible when there’s a D&O claim? Nope.
17. Insurance Not Provided
Crime (a.k.a. Fidelity Bond, Employee
KNOWLEDGE CHECK:
Dishonestyin Central America on
Student Bond)
service project gets sick from
Property drinking tap water.
Is there coverage for their
Workers’ Compensation
medical care?
Health, Travel
Aircraft, Auto, Watercraft
The individual’s or
family’s health or travel
insurance should apply.
18. Coverage Territory
GL
• Worldwide, BUT
Claim/Suit must be brought or lawsuit filed in the
U.S., its territories and possessions, or Canada
D&O/EPLCHECK:
KNOWLEDGE
Individual from Haiti files a lawsuit
against aWorldwide, BUT U.S.
• U.S. Rotary Club in the
alleging they’re responsible for their
Only when legally permissible Yes, assuming no
bodily injury. Is there coverage? other exclusions apply.
20. Exclusions
No Negligence!
Not covered! Must be at fault!
21. Exclusions
Acts or Omissions of Non-Insured Entity
Liability insurance for Rotary only. Ensuring that
others carry their own insurance is essential.
22. Exclusions
Property in the Club’s Care, Custody, and Control
FORE!
GL insurance provides coverage for 3rd party
property damage, but not if in care, custody, or
control of Club.
23. Exclusions
Expected or Intended Injury
No coverage for individual. Vicarious
liability coverage for insured Rotary entity.
24. Exclusions
No “Med Pay” for Insureds
• $5,000 is available to pay for injuries without
having to prove fault.
No “Med Pay.” Rotarians are an Insured.
25. Exclusions
No “Med Pay” for Athletics
• $5,000 is available to pay for injuries without
having to prove fault.
Must be at fault!
Use waiver/release forms!
26. Exclusions
Aircraft
Not covered. Hot air balloons are aircraft.
Non-Owned Aviation Liability for events with
aircraft.
27. Exclusions
Owned Autos
Commercial Auto Insurance Not Provided
28. Exclusions
Watercraft
• No coverage if…
Owned by Club or District
Used to carry persons or property for charge
Longer than 51 feet
Prearranged racing, speed, demolition, or stunting
activity
29. Exclusions
Mobile Equipment
• Golf Cart
• Trailer
Exclusions
• When transported by auto
• Prearranged racing, speed, demolition, or
stunting activity
30. Exclusions
Professional Liability
• Medical/Dental
• Finance/Accounting
• Architecture/Engineering
KNOWLEDGE CHECK:
As District Insurance Chair, I provide
incorrect insurance information that
leads a Club to suffer financial
damages. Club sues me. Am I covered?
No.
31. Exclusions
Fireworks
• No coverage for…
Transportation
Delivery
Storage
Set-up
Detonation
Takedown or Cleaning
Vicarious liability coverage for insured Rotary entity
33. Restriction - Large Events
25,000 attendance (cumulative)
Organized by Rotary
Requirement to notify RI Risk Management
Requirement to obtain separate liability
insurance for the event
KNOWLEDGE CHECK:
KNOWLEDGE CHECK:
Club operates beer booths at a 10-day City-run
Club has organized 3 day weekend festival
event with attendance over 200,000. Notify RI?
with 10,000 attendance per day. Notify RI?
Yes, and separate event insurance req’d.
Nope.
34. Coverage for Additional $$$?
Can the liability insurance program be
endorsed for an additional charge to provide
coverage when it’s excluded?
• No.
Additional insurance is not available for
purchase through RI.
• Contact a local insurance professional!
36. Certificate of Insurance
What is it?
• Proof of insurance
When to provide it?
• Only when specifically requested or contractually required
Why is it being requested?
• Without proof of insurance, no permission to have
event/activity
37. Certificate of Insurance
Where is it?
• Insurance Information Portal
• Insurance web page on www.rotary.org
• Type “Insurance” in www.rotary.org search box.
• Insurance Broker (Lockton)
1-800-921-3172
38. Certificate of Insurance
How to complete?
• Edit 2 boxes:
Date
Certificate Holder
• Save to computer or Print
39. DATE BOX
Insured Box: All U.S.
Rotary Clubs & Districts
Policy Info Policy Info
Description Box
CERTIFICATE
HOLDER BOX
40. Certificate – Additional Insured
What is it?
• Additional Insured status provides limited
insurance protection to another entity.
Why is it being requested?
• Becoming an Additional Insured on another’s
liability insurance policy can protect that entity
from using their own liability insurance.
41. Certificate – Additional Insured
Additional Insured Status (Description Box)
• Subject to policy terms & conditions
KNOWLEDGE CHECK:
Event attendee gets hurt, makes a claim
• Automatic ifvenue (who iswritten contract
against required in an Additional
• Only to the extent the Club Injury is from at fault for
Insured on Club’s policy). or District is
venue’s negligent maintenance. Are
bodily injury or property damage
they covered as an Additional Insured?
Additional Insured Endorsement
• Contact Insurance Broker liability
Venue’s own
Provideinsurance should respond.
copy of written contract to Broker.
Report matter ASAP to
RI Risk Management.
42. Certificate – Common Issues
Certificate of Insurance Accepted Nationwide
• BUT sometimes not…
Verbiage Issues
Coverage Not Provided
Proof of Insurance – Non Rotary Entity
Waiver of Subrogation
44. Risk Management
Loss Control Guidelines
• Insurance Information Portal
Insurance Broker & RI Risk Management
“An ounce of prevention is
worth a pound of cure.”
45. Risk Management
Ask and answer “what if” questions
• Well communicated and coordinated plans
• Don’t assume anything!
Common Sense & Due Diligence
Read and understand the contract!
• Know what you’re signing!
46. Risk Management
Involve Local Legal Professionals
• Don’t sign anything without legal review!
• Don’t accept unreasonable contractual provisions!
• Written contracts – participants, volunteers, vendors
Waiver/release form, permission slip
Involve Local Insurance Professionals too!
47. Risk Management
Managing Others:
• Vendors & Other Contractors
Written Contracts
• Indemnification and Hold Harmless Agreement
Insurance Requirements
• Certificate of Insurance
• Additional Insured Endorsement
48. Risk Management
Managing Others:
• Participants
• Volunteers
Written Contracts
• Waiver/Release Form
• Permission Slip - Youth
• Indemnification and Hold Harmless Agreement
Insurance Requirements
• Proof of Insurance
49. Risk Management – Youth Travel
Example: Service Project–Youth Volunteers
Fully examine project site’s risks
Follow all applicable laws
Review RI Code – 2.110.4 Travel by Youth
Review RI’s Abuse and Harassment
Prevention Training Manual
50. Risk Management - Athletics
Example: 5K Run/Walk Event
Insurance Information Portal – Loss Control
Guidelines
Local legal counsel review of written contracts
Waiver/Release Form
Ensure route is hazard-free
51. Risk Management - Fireworks
Example: 4th of July Fireworks Display
Diligently select Fireworks Producer
Involve local legal & insurance
professionals
Fireworks Producer must provide:
• Certificate of Insurance
• Additional Insured Endorsement
52. Risk Management – Co-Organizer
Example: Co-Organized Event
Due Diligence
Involve local legal & insurance
professionals
Co-Organizer must have liability insurance
53. Risk Management – Parks
Example: Community Park Maintenance
Involve local legal counsel
Clearly understand duties and have a plan
No indefinite responsibilities
No responsibilities better handled by others
55. Claims
Immediately Report to RI Risk Management
• Claim Form:
Insurance Information Portal
Insurance Page – www.rotary.org
Do not try to handle claim on your own
• Do not voluntarily make payment or settlement
56. Claims
Insurance assessments fluctuate based on
insurance claims.
Incentive to make risk management and safety
a priority.
A dollar saved on insurance, is a dollar that
can be used by someone who really needs it!
61. RI Code: 2.110.4. Travel by Youth
Recognizing that Rotary clubs and districts are encouraged to undertake activities that develop the
New Generations, club and district programs or activities that involve minors undertaking travel
outside their local community must develop, maintain, and comply with youth protection policies
and written procedures.
Clubs and districts:
1. shall obtain written permission from the parents or guardians of all youth participants for
travel outside the local community in advance;
2. shall provide parents or legal guardians with specific details about the program, location of
event, travel itineraries, sleeping accommodations, and contact information for program
organizers before departure;
3. should, when traveling 150 miles away from home residence or out of home country, require
the parents or legal guardians of each minor to provide travel insurance for the minor, which
includes such coverages as medical (when traveling outside home country), emergency
medical evacuation, repatriation of remains, and legal liability, in amounts satisfactory to the
club or district organizing the activity or event, with coverage from the time of the minor’s
departure from home until the return home.
62. For a foundation of a Rotary club or district to be covered
as a Named Insured Entity, it must meet all of the following criteria:
· Be 100% controlled by a U.S. Rotary club or district;
· All of its principals, officers, and board members must be members,
other than honorary members, of a Rotary club;
· Be income tax exempt under section 501(c)(3) of the Internal Revenue
Code;
· Operate with the sole purpose of raising funds and giving monetary
grants to other charitable organizations and/or individuals;
· Does not operate programs, charitable or otherwise.
Editor's Notes
Good Morning/Afternoon/Evening, my name is Peter Griffith. Today, I will be talking about the U.S. Rotary Club & District Liability Insurance Program, which automatically provides liability insurance protection to all active U.S. Rotary Clubs & Districts. The insurance is financed by U.S. Club dues payments to RI on the 1 July Semi-Annual Report. Again, this insurance is automatically in place, so long as the Club is active and dues paying. There is no application or sign up necessary to activate this liability insurance coverage. Throughout this presentation, you will hear me refer to this insurance coverage as this liability insurance program, or simply the Program.
Here are the main topics that I’ll be going over. First, I’m going to talk about some websites to visit and people to call if you would like more info. Next, I’ll go over what types of insurance are provided through this Program to give you an idea of what is and isn’t covered. Then, I’ll talk about the certificate of insurance, where to obtain it, and things to keep in mind when providing it for events. After that, going to talk about Risk Management and some tips to help prevent losses. Then, I’ll go over insurance claims, who to report to, and what needs to be done. Finally, we’ll have Q&A if we don’t run out of time by then.
First, it’s good to know where to go for more info. Here are the resources.
The best source of info online is the Insurance Information Portal. It provides comprehensive information about the insurance program, including the Certificate of Insurance, Loss Control Guidelines, Insurance Summaries and Policies. It also includes annual updates that are sent to U.S. Club Officers. This site requires the login info shown on the slide, which is also case sensitive. Only U.S. Rotarians are allowed to access the site. Another resource is the Insurance web page on rotary.org. No login is required. Easiest way to get to it is by doing a search on the word “insurance” from the main Rotary page of rotary.org. If you would like this info shown on the slide, please contact me.
If you would like to speak with someone over the phone, you can contact RI’s insurance broker, Lockton. Lockton offers a dedicated toll-free line, and they are available Monday through Friday from 6:30a – 2:30p, Pacific Time. Both Lockton and RI’s Risk Management Department can be e-mailed at any time. It’s rotary@lockton.com to reach Lockton, and it’s insurance@rotary.org to reach RI’s Risk Management Department.
Next up, we’re going to talk about what types of liability insurance are automatically provided to all active U.S. Rotary Clubs & Districts. Throughout the presentation, it’s worth noting that insurance coverage will always be subject to policy terms and conditions. While information may be presented to help explain coverage, it by no means alters or changes what the insurance policy says or how it will actually apply in the event of a claim.
The first is General Liability insurance, which I’ll refer to as “GL” insurance. This has been provided through RI for nearly 10 years, since July 1 st , 2001. Proof of insurance or a certificate of insurance evidencing GL insurance is oftentimes required to receive permission to hold or participate in an event or activity. The second is Directors’ & Officers’ and Employment Practices Liability Insurance, known as “D&O/EPL” or just “D&O” insurance. This has been provided through RI since January 1 st of last year, 2010. Before, several Clubs and Districts were purchasing this type of insurance on their own. As a heads up, because most insurance questions relate to Club and District events and activities, GL insurance will be the focus of this presentation.
GL insurance responds to third party claims of liability against an insured arising from that third party’s bodily injury or property damage. A third party is NOT an insured under this insurance policy. Therefore, Rotary Clubs and Districts as well as Rotarians or volunteers aren’t considered third parties. (CLICK) KNOWLEDGE CHECK – Who’s a 3 rd party? (CLICK) Generally, it’s anyone who isn’t considered an insured. This usually refers to someone who is not a Rotarian or Volunteer. For instance, it could refer to an event attendee from the general public.
Here are the Rotary entities that are covered by this insurance program. Any other Rotary affiliated entities not shown here are NOT covered. Also, any separate legal entities that a Club or District may create are also NOT covered, but with limited exception for Club or District Foundations that meet specific criteria for coverage. (YOU CAN CLICK ON IN THE CRITERIA TEXT BOX AND IT WILL TAKE YOU TO THE CRITERIA, BUT THE ONLY WAY TO GET BACK TO THIS SLIDE IS IF YOU RIGHT CLICK AND SELECT “LAST VIEWED” OR CLICK ON THE ‘SCREEN’ ICON IN THE BOTTOM LEFT AND SELECT “LAST VIEWED”.) So if you don’t see the entity name on this list, it’s very likely not covered. Please note that I might refer to the Club or District specifically in terms of a covered entity, but really it could mean any of these listed entities. (CLICK) Ok, knowledge check. Is youthact or earlyact covered by this liability insurance program? What do you think? (CLICK) The answer is No, because they aren’t listed here. It’s not an officially recognized Rotary program.
Individuals, such as Rotarians, Volunteers are also covered. But coverage for individuals is limited. For starters, GL insurance will only apply when a third party has a liability claim against an individual insured, when they are acting within the course and scope of their duties on behalf of a Rotary Club or District (or other insured Rotary entity from the last page). Second of all, remember that this is liability coverage, which only applies when a third party has a liability claim for that third party’s bodily injury or property damage. So, there is no coverage when an insured, such as a Rotarian or volunteer gets hurt or has their personal property damaged, destroyed, or stolen. Lastly, there are other limitations that restrict coverage to individuals. And these coverage limitations are usually because an individual should carry their own personal insurance (such as auto insurance required by the State) or the actions may be uninsurable in general, such as when an individual intentionally injures someone or commits a criminal act. (CLICK) KNOWLEDGE CHECK: Ok, next question, a Rotarian suffers a hernia while working on a Club project’s construction site and receives medical care for their injury. Will this liability insurance program provide coverage for their medical treatment? (CLICK) The answer is “no”. Again, this is liability insurance, which doesn’t function as a substitute for personal health insurance.
The GL insurance policy period is the same as the Rotary Year. It renews every 1 st of July. The policy provides up to $7,250,000 in insurance per occurrence. The first $250,000 of each claim is paid from a self insured retention that’s funded by U.S. Club insurance assessments. So, note that less money paid for GL insurance claims means lower insurance rates for U.S. Rotarians. (CLICK) KNOWLEDGE CHECK: Would a Club have to pay a deductible when there is a claim? (CLICK) Nope, if the claim is covered, a Club doesn’t have to pay a deductible, but they must cooperate with providing any information that’s requested to help investigate the claim. Also, just because there is no deductible, it this doesn’t mean that claims are “free.” On the contrary, claims lead to higher insurance assessment rates on the 1 July Semi Annual Report. So, there is an incentive for making safety and risk management a priority.
Two noteworthy coverages under this GL insurance policy provided by the Program are liquor liability and non-owned & rented auto liability. Liquor liability coverage is provided when it is the Club or District that serves alcohol at an event. It is expected that all applicable laws be followed, including ensuring proper licensing with all applicable governmental bodies. Reviewing the loss control materials on the Insurance Information Portal is strongly encouraged. Non-Owned & Rented Auto Liability coverage will always pay in excess of any insurance coverage already on the vehicle. And, it will never cover the owner of the automobile. So, if the owner is an individual Rotarian using their own personal auto on Club or District business and gets into an auto accident, no insurance coverage is provided to the individual, BUT there might be coverage for the Club or District if they’re sued by the injured person in an auto accident. Next, this non-owned and rented auto insurance coverage does not apply in Mexico. Lastly, this insurance does NOT provide coverage for any automobiles owned by the Club or District (CLICK) KNOWLEDGE CHECK: Does this insurance cover a caterer that the Club hires to serve alcohol at their event? (CLICK) No, again. The hired caterer should have their own liquor liability insurance coverage, and they should provide proof of this insurance before the Club agrees to sign any contract with them.
Directors & Officers Liability insurance responds to claims of liability against directors and officers arising from an alleged wrongful act, while Employment Practices Liability insurance responds to employment and membership claims. Again, please note that insurance coverage is subject to policy terms and conditions. And, it does not duplicate GL insurance. D&O/EPL insurance covers other types of liability insurance claims, but not ones arising from 3 rd party bodily injury or 3 rd party property damage. (CLICK) You might wonder “Why is D&O insurance needed?”. Well, a lot of people won’t serve on the Board unless this type of liability insurance is in place because of the threat of personal liability and that individual assets might be at stake in the event of a claim/suit. (CLICK) Next, you might wonder, “well, since my Club doesn’t employ anyone, why should we have to pay for EPL insurance?” EPL is usually included with D&O on non-profit insurance policy forms. Also, this coverage has been amended to respond to potential membership claims.
D&O/EPL insurance not only covers individual directors and officers, but the entity they serve too. Here are the Rotary entities that are covered by this insurance program. It’s the exact same list for D&O as it was for GL from a couple slides before. Again, if the entity isn’t shown above, chances are that BOTH the entity AND the individuals who serve on that Board are NOT covered. (CLICK) Next question – are separate legal entities created by Clubs covered? (CLICK) No, but there is an exception for a club foundation if it meets designated criteria. This applies for both D&O/EPL as well as GL coverage. AGAIN… (YOU CAN CLICK ON IN THE CRITERIA TEXT BOX AND IT WILL TAKE YOU TO THE CRITERIA, BUT THE ONLY WAY TO GET BACK TO THIS SLIDE IS IF YOU RIGHT CLICK AND SELECT “LAST VIEWED” OR CLICK ON THE ‘SCREEN’ ICON IN THE BOTTOM LEFT AND SELECT “LAST VIEWED”.)
D&O insurance is geared towards individuals, and it covers Club & District officers among others, including the Board of all other covered entities, such as a Club or District Foundation, if they meet the specified criteria. Conversely, EPL insurance is geared more towards the entity. D&O insurance can apply to current as well as past officers of the Club or District. Like GL insurance, coverage will only apply when an individual insured is acting within the course and scope of their duties on behalf of a Rotary Club or District (or other insured Rotary entity from the last slide). So if an individual was acting outside of the course and scope, coverage will be denied.
The D&O insurance policy period will be the same as the Rotary Year and renew every 1 st of July. Again, this insurance took effect on January 1 st , 2010, so initially, it spanned the entire calendar year of 2010. That policy’s coverage was extended 6 months to coincide with the Rotary Year. The policy provides up to $2,025,000 in insurance per claim. Of that amount, the first $25,000 is paid from a self insured retention. Similar to GL insurance, claims below $25,000 are funded by U.S. Club insurance assessments. Again, less money paid in insurance claims means lower insurance assessments paid by U.S. Rotarians. (CLICK) KNOWLEDGE CHECK: Does a Club or individual Club Officer have to pay a deductible when there is a D&O claim? (CLICK) Nope. Like GL insurance, there is no deductible to either the Club or Club Officer for a covered claim. Again, while there is no deductible, claims lead to increased insurance assessments.
This is just a brief, not exhaustive, list of types of insurance that aren’t provided by this insurance program. The GL and D&O/EPL insurance policies exclude coverage that is typically provided by other types of insurance, because insurance policies don’t usually duplicate coverage found in other types of insurance policies. In general, there is no property insurance to reimburse the Club or District for losses to owned property or property that’s in it’s care, custody, and control, including theft of money. There is no crime insurance, also known as Fidelity Bond or Employee Dishonesty Bond coverage. As mentioned before, bodily injury to a Rotarian is not covered. There’s no workers’ compensation, personal health insurance, or travel insurance coverage. Finally, there is no liability insurance coverage for a Club or District owned aircraft, auto, or watercraft. There’s limited liability coverage for autos and watercraft that’s NOT OWNED by the Club or District. However, liability from aircraft isn’t covered, regardless if it’s owned or not owned. (CLICK) KNOWLEDGE CHECK: Ok, here’s the situation… A student volunteer accompanies a group of Rotarians to Central America for a service project and gets sick from drinking tap water. Will this liability insurance program provide coverage for their medical care? (CLICK) It should be the individual’s or family’s health or travel insurance that should apply. A requirement to carry health or travel insurance should be in the permission slip or waiver and release form that’s signed by the student or the legal guardian of the student if they’re a minor.
Coverage is only provided to U.S. Rotary entities. For each type of insurance, coverage is worldwide, but for GL insurance, the claim or suit must be in the USA, one of it’s territories or possessions, or Canada. For D&O, insurance won’t be provided in countries where it’s illegal to do so. (CLICK) KNOWLEDGE CHECK: Another situation… An individual from Haiti files a lawsuit against a U.S. Rotary Club in the U.S. alleging that they’re responsible for his or her bodily injury. Assuming no other exclusions apply, will this liability insurance program respond? (CLICK) Yes, there’s coverage, assuming no other exclusions apply. The lawsuit was filed in the US.
Next up, I’m going to talk about policy exclusions. It’s not exhaustive, and again, coverage is always subject to the insurance policy’s terms and conditions. Most of these pertain to the GL insurance specifically, as most of the claims that arise are because of bodily injury or property damage, but some of these exclusions also apply to the D&O/EPL insurance too.
First, there’s no coverage if there isn’t any negligence by the insured for the injury or damage. For example, Veronica, an event attendee who is not a Rotarian or volunteer of the Club slips and falls at a restaurant 2 blocks away from a Rotary event. (CLICK) Is the Rotary Club liable for Veronica’s injuries? Were they negligent? (CLICK) Liability insurance would apply here only if the Club were at fault. The Club has nothing to do with somebody else’s premises 2 blocks away.
Next, coverage provided through the insurance Program is not transferable to non-Rotary entities, and the insurance company will not honor such arrangements. Some Clubs have agreed to sponsor or co-sponsor an event or activity in order to make the Program’s general liability insurance available to non-Rotary entities that don’t have or can’t afford their own insurance protection. (CLICK) Please ensure that all entities involved in the event or activities carry the appropriate general liability coverage.
Next exclusion – there’s no coverage for property in the club’s care, custody, and control. (CLICK) Here’s another scenario… A Rotary Club had a golf outing and reception at a local country club. The Rotary Club was permitted to store some expensive champagne in the facility’s refrigerator to be used later for the reception. The refrigerator was completely full, including lots of steak and lobster for a country club event to be held later in the week. While in the kitchen, one Rotarian decides to take a practice swing before heading out to the course, but, in the process, they unknowingly unplugged the refrigerator’s electric cord. After the outing, upon retrieving the beverages for the reception, it’s discovered that everything in the refrigerator has spoiled. What coverage applies, if any? (CLICK) There’s no coverage for the Club’s expensive champagne, since that was in the care, custody, and control of the Club, but there could be coverage for the rest of spoiled items in the refrigerator.
As mentioned before, expected or intended injuries aren’t covered. Also criminal acts are covered. These things are generally uninsurable. Here’s another example. (CLICK) Phil, a Club volunteer working at a concession stand sees his ex at an event with another guy. In a fit of rage, Phil throws a hot cup of coffee at them. The ex suffers severe burns from the coffee and sues Phil and the Club. Phil had NO prior history of violence and had served the Club admirably many times before. While Phil meant to throw the coffee at the ex, he didn’t mean to cause the burns. What coverage applies, if any? (CLICK) There is no coverage for Phil, regardless if he meant to burn his ex or not. But , since the Club could not foresee that Phil would do this, the Club would probably be covered still. Had the Club knowingly allowed a violent felon to work it’s concession stand, then coverage would likely be excluded to the Club also.
There is no Medical Payments coverage provided to Insureds. Med Pay, as it’s known, is available to pay $5,000 for injuries without having to prove fault, but again, this isn’t available to insureds. (CLICK) For example, Antonio, a Rotarian, is struck by lightning at a recurring community event. The Club really depends on Antonio to represent the Club at this event, because everyone else is too busy, so the Club feels somewhat responsible. Antonio winds up incurring $4,000 in medical bills. Will med pay apply? (CLICK) No, the expectation is that all Rotarians carry adequate personal health insurance. Furthermore, there is no medical payments coverage (available without fault) to Rotarians because they are considered an insured.
Next, there is no med pay for injuries arising from athletics. (CLICK) Another example --- Sally participates in a Rotary organized bicycle race annually, this year she falls off her bike and sustains $850 in injuries. No other cyclists fell and hurt themselves. The route wasn’t inspected by the Club at all a week before the event, but was reportedly in good shape. Is there coverage for her injuries? (CLICK) There is an assumption of risk when engaging in athletics, so any injury arising from participation isn’t necessarily anyone’s fault. In this example, it’s highly recommended to be certain that the route is free of hazards, but nevertheless, med pay doesn’t apply to Sally’s injuries. If Sally sues the Club for negligence, and the Club is proven to be at fault, then liability coverage would apply. (CLICK) For any athletics, it’s definitely worth considering having all participants sign waiver and release forms. Please consult with local legal counsel to ensure that such a form is properly written. A sample is available on the Insurance Information Portal for reference.
Already mentioned that liability arising from aircraft isn’t covered. (CLICK) Quick example, What if the Club owns and operates a hot air balloon that crashes into someone’s house. Is there coverage? (CLICK) No coverage, because hot air balloons are considered aircraft; therefore, coverage is excluded. (CLICK) Consider obtaining a non-owned aviation liability insurance policy for events with aircraft. Consult with a local insurance professional about this.
Already mentioned there’s no liability coverage for owned autos too. (CLICK) If the Club owns a vehicle, it needs to get it’s own auto insurance for that vehicle. Non-owned and rented auto liability coverage applies on a limited basis, but not to Club owned vehicles. Commercial Auto Insurance is not provided by the Program.
Also mentioned, there’s no coverage for any owned watercraft. However, there is limited coverage for non-owned watercraft that’s operated by a Club, so long as it’s not used to carry persons or property for a charge, is less than 51 feet long, and not used in any prearranged racing, speed, demolition, or stunting activity.
Next up, liability arising from mobile equipment such as golf carts and trailers are excluded in some circumstances, such as when it’s transported by an auto or when used for any prearranged racing, speed, demolition, or stunting activity. In other circumstances, liability insurance coverage may apply. (CLICK) Another example - a Club has a parade float entry every year and owns the trailer it decorates. Tony, a Rotarian, owns a large truck and agrees to tow the float during the parade each year. Before the trailer is hitched to Tony’s truck, a large gust of wind causes it to roll down a hill and accidentally hit a local news reporter, breaking their leg. Is this covered by the Program? (CLICK) Assuming the Club doesn’t have any other applicable insurance, the injury to the reporter would probably be covered. However, any damage to the trailer itself would not be covered because liability insurance doesn’t provide reimbursement for damage to owned property.
Next, there is a professional liability exclusion. Liability arising from one’s malpractice or errors and omissions from or related to their profession are excluded from coverage. This is usually covered by one’s own or their employer’s professional liability insurance policy . For example, if a dentist donates their service for a Rotary Club project and the beneficiary of these free services decides to sue that dentist for malpractice, this liability insurance program won’t provide any coverage to the dentist. (CLICK) KNOWLEDGE CHECK: If, in my role as district insurance chair, I provide incorrect information that leads your Club to suffer financial damages, and your Club decides to sue me because of this error or omission, am I covered by this liability insurance program? (CLICK) No, I am not, so please don’t sue me!
There is a Fireworks exclusion, but this exclusion also outlines what’s covered. (CLICK) There is no coverage for liability from direct involvement in anything listed: transportation, delivery, storage, set-up, detonation, takedown or cleaning. But, there is coverage for indirect or vicarious liability from these things. So, the point is the Club shouldn’t be directly involved, but should hire a reputable outfit to handle all aspects of the fireworks show. Proper management over the hired company is critical.
Next, intellectual property infringement. It’s typically not covered. There are some limited exceptions where there is coverage, such as when infringement arises from advertisement materials. It’s important to provide proper citation if using another’s artistic work to avoid copyright infringement. Be mindful of this in with any publication (including newsletters and bulletins). And, be very careful what you post on the internet.
One noteworthy coverage restriction is in regards to large events. When an event has cumulative attendance of 25,000 or more and that event is organized by Rotary, there is a requirement to notify RI’s Risk Management Department and obtain separate liability insurance for the event. The Program’s coverage then becomes excess over that separate event liability insurance policy. (CLICK) KNOWLEDGE CHECK: A Club organizes a popular weekend art festival that runs from Friday to Sunday. Attendance is 10,000 per day. Should RI’s Risk Management Department be notified? (CLICK) Yes, the Rotary Club is organizing an event with cumulative attendance of 30,000. This Club should obtain their own liability insurance for this event. Furthermore, the Club should provide a certificate of insurance evidencing that separate insurance to RI, and also notify RI of any large claims from the event. (CLICK) Here’s another one… KNOWLEDGE CHECK: A Club operates several beer booths every day during a 10 day festival that is run by the City. The overall attendance is expected to exceed 200,000, do we need to notify RI’s Risk Mgmt Dept? (CLICK) No, there is no requirement, since the Club isn’t organizing the entire event; however, it should be made clear with the City that the insurance being provided is meant to cover the Rotary Club’s liability for serving beer, not liability arising from anyone else’s operations associated with the festival.
Next slide asks the question… “Well, if coverage is excluded, can it be covered for an additional premium to RI?” (CLICK) The answer is No. The liability insurance program can not be altered or endorsed for an additional charge to cover something or some event that’s excluded. Insurance is not available for sale through Rotary International. If separate or additional insurance is needed, please contact a local insurance professional.
Now, let’s move on to the certificate of insurance. This is the most common question and/or issue that comes up.
If you’ve organized an event or activity, chances are you’ve been asked for a certificate of insurance. A certificate of insurance provides proof of insurance. It shows basic info about the insurance policies, including the amounts of coverage. Only provide the certificate of insurance when it’s specifically requested or contractually required. There’s no need to voluntarily provide it. It’s requested because the requestor wants assurance that if there is a liability claim or suit that you have insurance to pay for the damages. They want to know about your insurance, because if you don’t have any, then they might wind up having to pay for something that isn’t their fault. So, this is generally a part of the permitting or approval process.
The quickest way to get a certificate of insurance is by going online to the websites mentioned before in the Resources section of the presentation. So long as you know where to go, it shouldn’t take any longer than 5 minutes. The Insurance Information Portal requires the generic login info. The insurance page on rotary.org does not, and the easiest way to get to the certificate of insurance on rotary.org is by typing the word “insurance” in the search box found on the main rotary.org page. While getting the certificate of insurance on the web is the most convenient, if you need to speak with a human to get help, call the broker at the toll-free number during the week.
Once you access the certificate of insurance, you’re able to edit ONLY 2 boxes: the date and certificate holder boxes. Once you’re done, you can save it to your computer and e-mail it to whoever is asking for it. Or, you can print it off and hand deliver or fax it.
So here’s what the certificate of insurance looks like. The two RED arrows show which sections can be edited. For the date box, typically, one just enters the current or today’s date. In the certificate holder box, one puts the requestor’s info including their name and their address. Below the address line, it’s recommended to include a line referencing your club, the event name, location, and event dates or some combination thereof to identify what the certificate of insurance is for. While you can reference your Club and the event in this box, primarily this is meant to include the name and address of the requesting entity… not the Club’s name and address. The rest of the info on the certificate of insurance can’t be edited. It shows the insurance policies’ information including amounts of coverage, policy number, and policy period in the middle of the document. The description box contains verbiage that whichever entity is listed in the certificate holder box is an Additional Insured where required by written contract to the extent that damages are caused by the Insured. This verbiage can’t be altered. The Insured Box in the top left states that all U.S. Rotary Clubs & Districts are the insured and lists the address for headquarters in Evanston, IL. So, your Club is covered along with all other U.S. Rotary Clubs & Districts. This document can’t be altered to show that JUST your Club is the insured.
Oftentimes, in order to have an event or activity, a property owner and/or manager or another requesting entity will request or contractually require to be an Additional Insured on the Club or District’s liability insurance policy. This means that they want limited insurance protection on your Club or District’s liability insurance policy as a condition of allowing use of their property or services, and they want to be protected for when they’re being held responsible for bodily injury or property damage caused by the Club or District. This helps prevent them from having to use their own insurance when they’re not at fault.
As mentioned, Additional Insured status verbiage is already included on the description box of the certificate of insurance. So, if an entity is requesting Additional Insured status. They should be satisfied with the certificate of insurance alone, but sometimes they insist on an Additional Insured endorsement to give them added assurance. Additional Insured status will ONLY be provided if required in a written contract. This is a requirement stated in the insurance policy. An Additional Insured is a person or organization for who limited insured status is granted. Additional Insured status provides limited coverage for an entity in the event a claim arises from your club/district’s activities or operations. An Additional Insured is not covered for its own activities or operations. An Additional Insured endorsement can only be obtained from the Insurance Broker. They will not issue this endorsement until they receive and review the written contract between your Club or District and the requesting entity. (CLICK) KNOWLEDGE CHECK: After a Club event, the venue forwards a letter from an attorney alleging that their client, an event attendee, was hurt. The Club gave the venue a certificate of insurance, and the Club was contractually required to have the venue as an Additional Insured, but the injury was due to the venue’s negligent maintenance, which the Club notified them about and the venue agreed to fix it, but they didn’t. Will the venue still be covered as an Additional Insured since it was required in a written contract? (CLICK) The venue’s own liability insurance should respond to this claim, since the Club is not responsible for maintaining the venue. An additional insured is not covered when they’re solely negligent for injury. Ultimately, this matter would need to be reported RI’s Risk Mgmt Dept and it would be handled accordingly, with hopefully the venue taking full responsibility for their negligence.
Most of the time, the only insurance documentation that’s requested is a copy of the certificate of insurance to be allowed to have an event. All over the USA, our certificate of insurance is widely accepted. But, sometimes it’s not… and, particularly on the West Coast, insurance requirements are stricter and can be very particular. Usually, the requestor takes a “one size fits all” approach, which isn’t always suitable for non-profit community events and activities. Some changes to the certificate of insurance and additional insured endorsement can be made within reason. BUT, the expectation should always be that IF the requesting entity is at fault for injury or damage, THEY should be responsible and agree to contribute for THEIR share of the damages. If they expect anything less, it’s a sign that they’re being unreasonable and possibly irresponsible. Rotary SHOULD NOT be subjected to unfair or onerous insurance requirements for its good works in the community. Oftentimes, insurance documentation issues boil down to one of the following things mentioned. First, there might be verbiage issues with the certificate of insurance, where the requestor wants something very specific. The verbiage on the certificate of insurance and Additional Insured Endorsement is generally accepted, but contact the insurance broker, Lockton, if the requestor insists on a verbiage change. Second, there may be insurance requirements for coverage that’s not provided by this Program. If their requirements are inapplicable, they’ll usually agree to waive the requirement. For example, they might require workers’ comp, but it may be inapplicable if Club doesn’t employ anyone. Third, they might expect your Club or District to cover all the other entities involved (such as the vendors) for their liability at an event, but this liability insurance program isn’t intended to cover non-Rotary entities for their liability, because the expectation is that the other entities carry their own liability insurance. Finally, some requesting entities insist on receiving insurance documentation that provides a “waiver of subrogation”. This can not be provided and it’s usually inapplicable, so the requesting entity should agree to remove this requirement, because this request can not be accommodated.
Ok, so now we’re on to some Risk Management tips for events and activities.
A great source for risk management information is the Insurance Information Portal. There are several loss control documents on this site. Some are event specific, others apply to any event or activity. It’s recommended to check out this site to obtain info. Also, the Insurance Broker & RI’s Risk Management Department are available to assist with any risk management and insurance questions that may come up. (CLICK) It is usually the Clubs that don’t review this info or don’t call for help that wind up having to deal with injuries and damages later on. As Ben Franklin once said and remains true today, “an ounce of prevention is worth a pound of cure.” It’s better to avoid problems in the first place, rather than trying to fix them afterwards.
A great way to manage risk is to ask as many “what if” questions as you can to figure out what losses could happen and then find answers to ensure that there will be an appropriate response and protection should a loss occur. Effective communication is key in structuring a well coordinated plan. To make sure everyone’s prepared, assume as little as possible. If something bad happens, don’t assume that people will know what to do. Common sense and due diligence go along way. Typically, you’ll get what you give. The last bullets tie into the next slide, but it’s critical to read and understand any written contract that’s being entered into. No one should unwittingly enter into a contract on behalf of the Club or District. Know what you’re signing!
Involving local legal professionals BEFORE an event or activity is highly recommended. Too often something is signed without an attorney’s review. Legal professionals need to be involved to ensure there is a fair written contract in place with any entity that a Club or District may hire or do business with. If there isn’t a written contract in place, there should be. Furthermore, waiver and release forms and permission slips should be created and/or reviewed by legal professionals for participants and volunteers to sign BEFORE allowing them to participate or volunteer. Insurance professionals should also assist with reviewing what insurance requirements its Club is agreeing to and what insurance requirements it should impose on others. Oftentimes, a Club can obtain legal and insurance assistance within its own membership.
Many problems arise when not managing the risks presented by others! Due diligence is critical to select others who are trustworthy, reputable, and will not bring undue risk onto your Club or District. For vendors or other entities that a Club or District hires or contracts with, there should be a written contract that outlines who is responsible for what. Involve a local legal professional. This written contract should have the other contracting party indemnify, defend, and hold your Club or the District harmless from any liability arising from what they do. You don’t want to be held responsible for mistakes that they make, so this should be clear in the written contract. To enforce this, there should be insurance requirements imposed ON THEM in the contract, including GL insurance. Contact a local insurance professional to determine what else is appropriate to enforce on them. The written contract should require THEM to provide both a certificate of insurance and Additional Insured endorsement that has your Club or the District as an Additional Insured on their GL insurance policy (and any other insurance policies deemed appropriate by the local insurance or legal pro).
When working with participants and/or volunteers, you’ll want to involve local legal counsel to create a waiver and release form that clearly explains the risks involved, and that by signing the form, the participant or volunteer understands and accepts these risks. Please refer to the Insurance Information Portal for a sample form. This form can also be used to explain that any injury or illness should be covered by their own personal insurance, and that by participating or volunteering they agree to hold your Club or the District harmless. Furthermore, this form may also want to include something about granting permission for the use of their name and image. With youth, you’ll want a legal guardian to sign a permission slip in which many of the same things just discussed can be included in that form. Obtaining proof of insurance from participants may be appropriate for some activities, such as when it involves use of a motorized vehicle, like watercraft. Obtaining proof of insurance from volunteers may be appropriate for some activities, such as activities held at the volunteer’s home or when they’ll be using their personal automobile to transport others for the Club or District. In these cases, consider obtaining proof of homeowners or auto insurance. Again, you’ll want to discuss with a local insurance professional to determine what types of insurance should be evidenced prior to allowing participation.
As an example, let’s consider a service project with youth volunteers. Here’s a couple of things worth considering. You’ll want to fully assess the project site’s risks, including transportation, housing, and sanitation issues, as well as all other hazardous conditions. Also, you’ll want to ensure full compliance with any applicable laws, especially if traveling outside of the USA. All risks should be clearly explained in the permission slip along with any indemnification and hold harmless provisions. Also, insurance requirements should be clear, including expectations that the family should have their own health insurance. Special consideration may be needed for travel insurance, including it’s associated benefits, such as emergency medical evacuation. It’s good to review the applicable RI Code – 2.110.4 Travel by Youth about this. (YOU CAN CLICK ON THE RI CODE BULLET POINT AND IT WILL TAKE YOU TO THE CODE, BUT THE ONLY WAY TO GET BACK TO THIS SLIDE IS IF YOU RIGHT CLICK AND SELECT “LAST VIEWED” OR CLICK ON THE ‘SCREEN’ ICON IN THE BOTTOM LEFT AND SELECT “LAST VIEWED”. Finally, you might want to refer to RI’s Abuse and Harassment Prevention Training Manual for more info.
As another example, let’s consider a Run or Walk event. There is a loss control document on the Insurance Information Portal on the topic that is available for review. Local legal counsel should review any written contracts. Whoever is in charge of the route’s property needs to take responsibility if the route turns out to have been negligently maintained. The Club or District shouldn’t be held responsible for injuries beyond its control. There is also guidance on the Insurance Information Portal pertaining to waiver and release forms that should be reviewed. Finally, it’s recommended to thoroughly inspect the route to identify hazards and have them corrected prior to the event. So, this might entail making sure that the property owner or manager is doing their job to keep the property hazard-free.
Ok, let’s consider a 4 th of July Fireworks Display. Remember from before that there is an exclusion that basically means that you got to hire another company to actually do this. However, there’s coverage for indirect or vicarious liability. Things to do include picking a good fireworks producer who has an established safety track record and has adequate liability insurance to be able to take responsibility if something goes wrong. You’ll also want to involve local legal and insurance professionals to ensure that a fair written contract is in place with appropriate insurance requirements. For certain, the written contract should stipulate that the Fireworks Producer must provide a certificate of insurance and Additional Insured endorsement prior to the event to your Club, otherwise, they shouldn’t be allowed to do it.
As another example, if you’re working with a non-Rotary entity to co-organize an event. Diligently screen the co-organizer as if they were a vendor or contractor of the Club. Only want to work with trustworthy and reputable partners. You’ll want to involve local legal counsel to have a written contract in place to outline who is responsible for what. Depending on what each party is doing, you may want to enforce insurance requirements. At a minimum, the co-organizer should have their own GL insurance, because this liability insurance program isn’t intended to cover the liability of non-Rotary entities. By no means, should the relationship be one where the Club or District agrees to insure the co-organizer OR the event OR operations within the event that is beyond the control of the Club or District. You’ll want to involve an insurance professional to determine what’s appropriate regarding insurance.
Last example is involvement with a community park. Like the previous examples, you’ll want to involve local legal counsel to help understand what responsibilities and duties are being agreed to in the written contract. You’ll want to have a well coordinated plan to perform whatever work is necessary for this type of project, including regular maintenance to ensure that nothing falls into disrepair and that all identified hazards are corrected before someone gets hurt. It’s recommended to never agree to something for an indefinite period of time. Sometimes there’ll be a written agreement that 20 years down the road will be completely forgotten over time, and then something happens, and no one had any idea that an obligation to the community even existed. That’s why you don’t want to be contractually obligated to do anything for an indefinite period of time. Furthermore, it’s good to have local legal counsel involved to make sure that there’s nothing being agreed to that should be handled by other entities, which may include the other contracting party that’s trying to transfer responsibility for something that they really shouldn’t be!
Alright, on to Claims.
When there is an incident arising from a club/district event or activity, it must be reported immediately to RI Risk Management to allow the incident to be properly investigated. Please be aware that late claim reporting may affect whether or not the insurance company will provide coverage. Claim forms can be found on the Insurance Information Portal and the Insurance web page on rotary.org. Coverage will be jeopardized if you voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without the insurance company’s consent. The insurance policy prohibits this. DO NOT admit liability or suggest compensation will be offered. DO NOT try to handle the claim without the assistance of the insurance company.
The insurance assessment rate on the 1 July Semi Annual Report depends upon how many and how much is paid in insurance claims, so more insurance claims means higher insurance assessment rates. There is definitely an incentive to make risk management and safety a focal point for all Rotary conduct, because ultimately it will lead to more money available to support those who really need it, and that’s what it’s all about!
I’m just going to page through the next slides to refresh what resources are available to learn more about this liability insurance program.
There are websites where you can access info. One requires a generic login. The other is off of rotary.org.
If you would like to speak with someone over the phone, you can contact RI’s insurance broker, Lockton. Lockton offers a dedicated toll-free line, and they are available Monday through Friday from 6:30a – 2:30p, Pacific Time. Both Lockton and RI’s Risk Management Department can be e-mailed at any time. It’s rotary@lockton.com to reach Lockton, and it’s insurance@rotary.org to reach RI’s Risk Management Department.
Any questions? Remember, let’s be careful out there! Thank you. NEXT TWO SLIDES ARE RI CODE & FOUNDATION CRITERIA… END SLIDE SHOW HERE!
