It may not be obvious, but professional associations face many types of professional liability claims. These kinds of claims can include:
- Daños Personales
- Copyright infringement
- Marketing errors
- Missed deadlines or opportunities
- Faulty research
- Grant administration errors
- Errors with member certification or decertification
Picture this: Your client is a non-profit organization that the Internal Revenue Service (IRS) approved as a tax-exempt, charitable organization or association. To help protect their association, you’ve secured:
- Nonprofit directors and officers (D&O) insurance
- Employment practices liability (EPL) insurance
- Crime liability insurance
- General liability insurance
- Cyber liability insurance
However, have you considered getting a professional liability insurance quote for this client as well? Professional liability claims aren’t as uncommon as you may think. And without the right coverage, they can be costly.
What Is a Professional Association?
Merriam-Webster Dictionary defines a professional association as “an unincorporated business entity formed for the purpose of providing a professional service.”
The largest association in the United States is the American Association for Retired Persons (AARP). Founded in 1958, the organization has nearly 38 million members.2
How Many Associations Are There in The United States?
There are a lot of associations across the country, and the numbers change each year. In 2019, there were 1,870,666 tax-exempt organizations.3 Of these organizations:
- 45,888 were labor and agriculture organizations
- 62,700 were trade and professional associations
- 1,365,744 were charitable and philanthropic organizations
You can probably find an association for almost any profession. From the American Accounting Association (AAA) to the Zoological Association of America (ZAA), the list spans the alphabet.
When Does Professional Liability Coverage Become Helpful to Associations?
Newsletter Liabilities
These newsletters can leave associations exposed to risks. For example, say one of the articles in a recent newsletter wasn’t vetted correctly. It contained harsh comments about a business person pushing for a new law that would negatively affect the association. The business person sues the association for libel and other defamatory or disparaging statements made in the article.
Our professional liability policy can help protect the association and cover this claim. Without it, the association would have to pay for legal costs and damages on its own.
Certification Errors
Associations provide their members with education and training. When members finish that training, they can get a certification. These certifications are valuable in a member’s title and on their resume. It could make or break a job opportunity for some members. Associations can face liability claims if:
- It didn’t process a certification correctly
- The certification wasn't filed on time
- It decertified a member for not following certain association rules
In 2018, a physician group sued the American Board of Internal Medicine over its maintenance of certification process.4 The lawsuit detailed the jobs some physicians lost as a result of losing their certification. Although the court dismissed the lawsuit, the physician group filed an appeal.5 If the association had professional liability coverage, it could help pay for:
- Defense costs
- Settlements
- Judgments
- Witness fees
Grant Administration Mistakes
Many times, associations will provide a grant to fund research related to their member’s industry. This can leave the association open to liability risks if it’s not done correctly.
For example, say an association agreed to give a grant to a research company. The company gets the grant in four payments after completing each research phase. The association gave out the first three payments on time, but delayed paying the final grant payment. This meant they couldn't complete the research and publish their findings, so the research company sued the association. They claimed that there was negligence in their administration of the grant and that they did not follow the guidelines established in the grant document.
Class-Action Lawsuits
Many associations provide their members with benefits that could leave them open to risks.
For example, an association's members get savings when shopping with a specific company. A board member's spouse is the principal of the retailer where the members get savings to. Some members believe the board member is getting a financial benefit from the deal so they file a class-action lawsuit against the association.
The legal costs for an organization to defend themselves in a class-action suit could be crippling, especially for smaller associations. Our professional liability insurance includes coverage on a “Duty to Defend” basis. This means our policy can help pay for the association’s defense costs and other legal expenses.
Getting Professional Liability Insurance for Associations
Associations face many different types of professional liability claims. The good news is that The Hartford has the expertise to properly underwrite association professional liability insurance for you and your clients. We have more than 200 years of experience and understand the unique risks associations face. Our specialists can provide deep expertise and help you get the coverages your clients may need.
Contact an underwriter today or email your association professional liability insurance submission to HFPexpress@thehartford.com
In Texas and California, the insurance is underwritten by Hartford Accident and Indemnity Company, Hartford Fire Insurance Company, Hartford Casualty Insurance Company, Hartford Lloyd’s Insurance Company, Hartford Insurance Company of the Midwest, Navigators Insurance Company, Navigators Specialty Insurance Company, Maxum Casualty Insurance Company, Maxum Indemnity Company, Trumbull Insurance Company, Twin City Fire Insurance Company, Hartford Underwriters Insurance Company, Property and Casualty Insurance Company of Hartford and Sentinel Insurance Company, Ltd.
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