Insurance cannot protect your clients or your organization from harm or loss, nor can it safeguard you from allegations of wrongdoing. The role of insurance is coverage of the cost of investigating or refuting allegations of wrongdoing and, of course, coverage of those losses that are insured.

Policies that your organization should consider obtaining include:

• General liability insurance

• Directors’ and officers’ insurance

• Sexual abuse and/or harassment

• Insurance for particular risks, for example counselling or third-party use of property

If your organization has a board of directors and officers, then it is vital that the board familiarizes themselves with basic terms and provisions of policies and upgrades the insurance coverage as necessary.

Below are some factors that organizations should consider before purchasing any insurance:

• Who is being insured, for what risks and in what amount?

• What are the exclusions in the policy and how do they apply to your organization?

• Is there coverage for sexual abuse of children and is it based on claims made coverage or occurrence based coverage?

• Has the organization disclosed all risks in writing to its insurer and its insurance agent?

• Has the insurance broker been asked in writing to give an assessment of your insurance needs?

• Have all risks been identified and covered under the appropriate policy in the appropriate amount?

• Has the insurance coverage been co-ordinated with the indemnity by-laws of the organization? Does the organization have an adequate indemnity by-law?

• In Ontario for charitable organizations, have the statutory requirement to purchase directors and officers liability insurance or pass an indemnity by-law been met?

Keep in mind that not all factors will be equally important to your organization. You should talk to an insurance professional for more information on what your organization needs and what policies or coverage are available for your particular risks. In addition, a smart risk management practice advises your insurance agent of all activities and risks of your organization on an annual basis to determine if your coverage is adequate.

C. Legal Risk Management Committee

It is important to consider establishing an on-going legal risk management committee for your organization. The committee can be composed of directors, employees, volunteers, professionals or other individuals who have first-hand knowledge of your organization’s activities. The role of the committee is to actively participate in the risk management process; to periodically identify areas of risk and potential liabilities; prioritize the risks; recommend proactive and remedial steps; and evaluate the adopted approaches.

The committee should have two primary responsibilities:

1. To develop a risk management covenant, which is a customized statement of goals that reflects your organization’s programs, activities and concerns. The covenant should also assert your organization’s commitment to ensuring a high level of safety in all of its activities.

2. To create a risk management action plan. The plan is an outline your organization’s risks and strategies. The pan should prioritise the risks summarize what practical strategies that have been selected to address these concerns.

During the identification process, the committee should look at the issues highlighted in this summary as well as the following:

Board Management Issues

Identify which group is in charge of the organization and their authority, duties, and responsibilities

Fiscal Management Issues

Addresses issues such as fundraising, complying with statutory requirements of employees’ benefits and deductions etc.

Review of Documents

Identify the existence and location of key organizational documents and review them periodically, as well as periodic review of contracts and agreements and insurance policies

Keep in mind that any form of risk management practice you consider adopting should be evaluated by a qualified lawyer and other professionals as necessary, such as a risk management consultant in your province or territory.

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