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Not for Profit Entities – the Risks YOU Face!

  • Adroit Insurance Group
  • October 7, 2015

There are many misconceptions around about the cover afforded to not for profits under the Limited liability provisions of an incorporated body. The reality is that you hold the same responsibilities at law as a director of a publicly listed company and your personal assets may be at risk.

Further confusing these matters are the changes within the VMIA (Victorian Managed Insurance Authority) and the realisation that many organisations previously covered automatically may have no cover now or reduced cover at best.

There are many myths, here are some truths.

An organisation that becomes incorporated only provides protection for the members and office bearers against personal liability for the organisations debts.

What does this mean?

It means key risks still exist and that personal assets of office bearers are also at risk. Cover for such matters as;

• Personal Injury and property damage to third parties is not covered
• Employment practices issues (unfair dismissal, sexual harassment etc.) are not covered
• Theft of monies is not covered
• Injury to volunteers is not covered
• Damage to property and or stock is not protected

The limited liability provisions are just that, limited, to personal liability on the debts incurred. This does not, however, mean that someone cannot sue you if you not have acted with reasonable skill or care.

The only way to fully protect an organisation is to ensure that appropriate insurance cover is taken, covers such as Directors & Officers cover, Legal Liability, Association Liability need to all be considered by various organisations. They provide the legal defence costs to defend an individual and the entity (subject to policy conditions) in the event of an issue but will also settle the amounts awarded. Without additional cover, you are at risk.

Recent changes to the VMIA have meant that many organisations will no longer be insured under that program. While this appears on face value to be a major concern, the reality is that there are policies available in the retail space to fill the void.

Where to start?

The Adroit Insurance group has recently partnered with Ansvar Insurance to provide a quality service, to educate organisations ensuring they are fully aware of the risks they face and the cover(s) needed to fully protect themselves.

Adroit has a geographical spread from Geelong to Traralgon to Albury and areas in between meaning an expert is not far away. Our risk advisers are trained to assess your organisation on its merits and provide advice pertinent to you. Important to also note that our risk advisers are independent of any one insurer and although a partnership exists with Ansvar, your best interests are always front of mind.

We look forward to helping you with your queries and hope that we’ve gone some of the way to help you understand your risks.

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