The Chubb Group of Insurance Companies has introduced ForeFront Portfolio for Not-for-Profit Organizations, which includes insurance coverage for directors and officers and entity liability, employment practices liability, fiduciary liability, kidnap/ransom and extortion, and crime.
“With a heightened focus on corporate governance and regulatory scrutiny in all areas of business, directors and officers at not-for-profit organizations are growing more concerned about the spillover effects of these two issues,” said Michael Schraer, vice president, Chubb & Son, and not-for-profit product manager, Chubb Specialty Insurance.
Chubb’s ForeFront Portfolio for Not-for-Profit Organizations offers five insurance coverage sections. Customers may also purchase individual limits for each coverage section or a single combined limit for their executive liability insurance coverages.
Customers purchasing the employment practices liability (EPL) insurance coverage section can also access, at no cost, Chubb’s Employment Practices Liability Loss Prevention Program, which offers customers the opportunity to receive a premium reimbursement for approved loss prevention expenses. The loss prevention program also provides access to: a toll-free hot line, connected to a leading law firm specializing in employment practices liability litigation, to assist customers with handling employment issues when they arise;
a Web site that features best practices for establishing an EPL loss prevention program; and a network of more than 120 law firms, human resources consulting firms and others who can help address specific employment issues.
“Not-for-profit organizations are especially susceptible to the financial devastation that may accompany litigation and the cost to defend such suits,” said Schraer. “In addition, attracting experienced and talented directors, officers, employees and volunteers can be difficult—especially if their personal assets are on the line when they go to work for a not-for-profit organization. Our new ForeFront Portfolio for Not-for-Profit Organizations is designed to specifically meet the insurance needs of this market by providing affordable and broad insurance protection for the organization and the people who make it run.”
Some highlights of the coverage sections include:
* 100% of defense costs within the policy limit are paid for covered claims, and defense costs are advanced
* Chubb’s duty to defend claims and customer access to a panel of expert attorneys
* Coverage for defense expenses outside the limits of the policy for qualifying customers
* Personal injury and publisher’s liability insurance coverage for allegations such as libel, slander and invasion of privacy
* Limited excise tax coverage for situations where the IRS levies unexpected tax liability (for example, on an executive director’s compensation that the IRS deems to be excessive)
Although many not-for-profit organizations recognize their exposure to employment practices liability and directors and officers liability claims, they often overlook their fiduciary liability exposure. “Just like for-profit businesses, not-for-profit organizations offer employee benefits as a way to attract and reward good employees. That means the not-for-profit organization, its fiduciaries and its benefit plans can also be sued by plan participants, as well as the Department of Labor and the Pension Benefit Guarantee Corporation,” Schraer said.
“Not-for-profit organizations can be targeted as an ‘easy mark’ by white collar criminals and extortionists,” said Schraer. “Some 80 percent of workplace crime is carried out by employees and the consequences can be costly especially for a not-for-profit where every dollar counts. The average organization loses 6 percent of its total annual revenue to fraud and abuse committed by its own employees.
“Cause-related not-for-profit organizations and their employees can be targets for extortion threats by radical groups and criminals,” said Schraer. “This type of unexpected threat can quickly paralyze operations and push the organization to its financial limits.”
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