Insurance Checklist for Centers Providing EFMH
Cornerstone of Protection – Commercial General Liability Insurance
Commercial General Liability insurance protects your entity against
Bodily Injury and Property Damage suits. Per Occurrence limits of
at least $1,000,000 are normally recommended. A good General
Liability policy pays investigation and legal fees outside the limits.
This means that the policy pays to defend your entity without reducing
the amount available to settle claims. There is never a deductible
on a good General Liability policy.
Protecting Your Professional Exposure – Professional Liability for
Therapists
General
Liability insurance is triggered if suit is brought alleging Bodily
Injury or Property Damage was caused by the center’s operation. If
the suit alleges that a therapist used an incorrect course of treatment
or did not use proper professional judgment, Professional Liability
insurance (purchased by the therapist) is triggered. It is
possible that a single suit could trigger both Professional and General
Liability coverages.
If You Own Your Facility – Property Insurance
If you
own your own facility, Property insurance is normally purchased.
If an owned structure is damaged, property insurance pays to clean up
and rebuild. Property insurance can also provide coverage for
owned tack, tools and other equipment if these items are scheduled on
the policy. There is normally a deductible on Property policies,
and the deductible is applied to each loss.
Avoiding Minor Lawsuits – Excess Accident Medical Insurance
An Excess
Accident Medical policy provides insured classes of individuals
(normally riders and volunteers) reimbursement for medical expenses if
injury occurs at the center. The injured person does not bring
suit to obtain benefits under this coverage. Excess means the
injured person’s own medical coverage is accessed first. If the
injured individual has no medical coverage, then this policy functions
as primary coverage. The Excess Accident Medical policy is meant
to deter liability lawsuits for minor medical expenses.
If You Have Employees – Workers Compensation Insurance
If the
entity has employees, Workers Compensation insurance is normally
required. Workers Compensation laws, rates for various classes of
employment and penalties for non-compliance vary by state. It is
important for every center to investigate their individual Workers
Compensation needs.
If You Use an Automobile in Your Business – Commercial Auto Insurance
If the
entity owns vehicles, and particularly if the entity transports
employees or students, Commercial Auto insurance is required. A
personal auto policy is not designed to cover the commercial exposures
of a business entity. A personal auto policy will normally not
respond if employees use a personally owned vehicle for center business.
If Higher Liability Limits Are Desired – Commercial Umbrella Liability
Insurance
Some
centers are not comfortable with only $1,000,000 Per Occurrence General
Liability coverage. If higher limits are desired, Umbrella
Liability insurance is purchased. Remember that an individual’s
personal umbrella will respond only to suits arising out of personal
activities. If the center desires liability coverage in excess of
its primary Commercial General Liability coverage, a Commercial Umbrella
is needed.
Protecting Board Members – Directors & Officers Liability Insurance
Directors
& Officers insurance protects directors and board members if it
is alleged they did not properly perform their duties as officers of
the entity. It is important to remember that all Directors &
Officers policies
exclude coverage for any Bodily Injury suits. Board members are
protected against Bodily Injury suits by the entity’s General Liability
policy. Directors & Officers policies protect against Employment
Practices lawsuits, allegations of misuse of funds and other
fiduciary-type claims.
