What does Association Liability Insurance Cover?

Each section of this policy will usually cover your own legal defence costs as well as compensation and legal costs payable to the claimant (i.e. a third party) following an allegation of a "wrongful act" by the Association and/or persons insured under the policy.

Each section of a typical Association Liability Insurance Policy is summarised below.

Professional Indemnity Insurance

Protection for claims that arise from wrongful acts whilst providing professional services to third parties, particularly members of the Association.

Most Associations will have insurance in place to protect against bodily injury (public liability/workers compensation) or property damage (property insurance/motor fleet) but not all Associations are aware of their economic loss exposure.

Office Bearer's Liability Insurance

Personal protection to all office bearers for claims that arise from wrongful acts, committed whilst representing the Association, for which the Association has not agreed, or is unable, to provide indemnity.

Protection is also provided to the Association itself where either the Association has agreed to provide an indemnity to the office bearer (Association Reimbursement) or because the Association becomes legally liable  for such claims (Association Liability).

These days it's not just directors of large public companies who are exposed to personal liability for breaches of the duties they owe. Office bearers of Associations (including Not For Profit organisations) are also at risk.

Employment Practices Insurance

Cover for any loss the Association is legally liable to pay arising from certain employment related wrongful acts such as unfair dismissal, discrimination, failure to promote and harassment/bullying.

Fidelity Insurance

Protection for loss of money, securities and property caused by a dishonest or fraudulent act, committed by an employee or other specified persons and the cost of investigating the theft or fraud.

Taxation Audit Investigation Insurance

Covering professional adviser's fees (i.e. an accountant) following an ATO tax audit of the Association.

Other significant covers that can be included within Association Liability Insurance are:

• Legal representation costs to cover the costs incurred in preparing for and being represented at certain formal inquiries
• Pecuniary civil penalties levied against the Association and insured persons
• Occupational health & safety defence costs.

Who is covered under an Association Liability Insurance policy?

Normally the Association and its directors, secretaries, officers, trustees, committee members, employees (whether salaried or not), volunteers and any persons acting on behalf of the Association at the direction of an officer or board or committee of management of the Association.