Chapter Insurance Coverage

NAMGAR provides insurance coverage for its qualified chapters in the US and Canada. There are two primary coverages of any club. These are General Liability Coverage for events run by Chapters, and Directors and Officers Insurance.

General Liability Coverage

General Liability coverage is provided on a blanket basis so it would cover the club at the national level and the chapters for the events they are hosting or participating in. General Liability is designed to protect the club from third party bodily injury and property damage claims. This means it is not designed to pay for any injury or damage for the club members, but outside people that would take issue with the actions/fault of the club. Similar to homeowners insurance where it is not going to cover you walking down your sidewalk and tripping but rather a guest that is walking down your sidewalk and trips.

This coverage is designed to cover the club anywhere in the US or Canada. Certificates of insurance can be generated but are not required as the policy already covers the events you are having or participating in. The certificates are more like a proof of coverage.

General Liability Claim/Need Scenarios:

A club is using a park for an event. The club sets up a tent and does not put the needed stakes in the ground. The tent lifts up and blows across the park hitting a family having a picnic and causing injury. The family comes back to the club for payment to cover their injuries. A chapter chooses to have an event at a local venue which is requiring proof of insurance coverage. General Liability coverage would be the needed coverage to be able to use that venue.

NAMGAR has an informational display at a national event. The display was damaged in shipping and when displayed falls breaking windows at a venue resulting in property damage. The policy would protect the club in a covered loss against this property damage.

Directors and Officers Insurance (D&O)

Directors and Officers coverage is for the board members of the organization to protect them as individuals for the decisions they make on behalf of the organization. The coverage would be for the national board and the chapter board members. As a director or officer, you could be personally liable for errors or omissions involved in the management of the organization. Directors and officers can be sued for a range of issues including fiduciary duty breaches, misuse of restricted funds, mismanagement as well as liability arising out of improper conduct by volunteers or employees. Legal fees and damages resulting from non-profit directors and officers claims can exceed the organization’s liquid net assets and prevent the organization from being able to indemnify directors and officers.

D&O Claim Scenarios:

A club hosted competitions for members over the course of the year. Selected vendors were allowed to sell their products at these events. Members alleged that vendor placement was based upon favoritism and the allocation of the time slots for the competition was unfairly influenced by board friendships. Defense expenses were approximately $65,000.

Members of an association sued the group’s board of directors over the election process for directors. It was alleged that notices of elections were not sent out in a timely manner, which precluded new leadership from being elected. It was also alleged that the board members routinely refused to hear membership at meetings for new business so as to maintain their internal agenda. These complaints routinely involved a former board president seeking to gain re-election but who was voted out a decade earlier. Defense expenses were approximately $300,000 and the parties agreed to a new election with external oversight as part of the settlement agreement.

An annual fundraising gala was held. The event location host had a deal with the insured to promote their location and gave a discount if the number of attendees exceeded 200. The insured sold over 200 tickets and expected to receive a discount. However, the event host said that 175 people actually attended the event and they owed the full price. The board member who signed the contract was sued along with the insured organization for payment. Defense expenses exceeded $35,000 and the parties ultimately agreed to a walk away settlement.  

Qualifying for Coverage

All insurance companies are requiring more information and a clearer picture of what/who they are insuring. Chapters will be able to be scheduled on the policy, meaning that a chapter that does not provide the information MAY NOT BE COVERED!! By providing the following information it can help lower the overall cost of a policy as the Underwriters have a more accurate view of what is being insured. In order to qualify for the insurance coverage, NAMGAR Chapter contacts must provide the following information to the NAMGAR Chairman.

1. List of Assets. Some examples of assets include cash, accounts receivable, inventory, investments, land, buildings, and equipment. Many small clubs’ assets consist only of the cash in their checking account.

2. Details of Revenues. Revenues are the amounts that a club receives from membership dues, or money from other events through the course of the year. 

3. Effective Date and Contact Information. Also include the effective date, and the name and contact information of the person in the Club who is responsible for the data (probably the club secretary or treasurer).

Last updated on July 3, 2017.