Association Liability Insurance – What, Why, When, Where & How?

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“Potential litigation or prosecution risks faced by associations today can not be ignored…”




[Why] do your clients need protection?


  1. Despite the non-profit or charitable nature of many associations, the risks they face have increased significantly in recent years
  2. Members of associations boards of management or management committee carry personal responsibility and liability for their acts and omissions.
  3. In an era of increased responsibility and accountability, many associations are now discovering that they can incur liability through the services that they provide to their members or to members of the public
  4. Cover for legal costs and expenses is important as litigation involving directors, officers and committee members of an association is often complex and expensive. It is imperative that they have access to specialized and quality legal representation, to safeguard their interests in the most effective way
  5. Associations Liability Insurance (combined Professional Indemnity Insurance and Directors’ and Officers’ Liability Insurance) is the solution that helps protect association against legal liability which it may occur through the conduct of its activities or provision of services. Associations can be rest assured that your Insurers can afford them assistance and support.


[What?] does Association Liability Insurance cover?


Covers for directors, officers, secretaries, trustees, employees, and committee members of an association (whether salaries or not) for:


  1. Negligence
  2. Wrongful misstatement, misrepresentation,
  3. Breach of trust,
  4. Breach of fiduciary duty or breach of warranty of authority
  5. Unlawful default


Including (1) compensatory damages awarded against directors, officers and committee members of the association, (2) out-of-court settlements, (3) defense costs and expenses, and (4) costs of appointing legal expertise


[Why?] Association Liability Insurance?


It provides covers for…


  1. Civil Proceedings brought against directors, officers, secretaries, trustees, employees, and committee members of an association
  2. Successful Defense of Criminal Proceedings
  3. Official Investigations and Inquiries – costs and expenses incurred in representing directors, officers, secretaries, trustees, employees, and committee members of an association
  4. Employee Actions – actions brought by fellow directors, officers or employees alleging unfair dismissal, discrimination or sexual harassment.
  5. External Positions – where a directors, officers, secretaries, trustees, employees, and committee members of an association is representing the association on the board of some other organizations 


Associations Liability Insurance providesAutomatic Extensions for…


  1. Loss of Documents
  2. Intellectual Property
  3. Committees
  4. Official Investigations and Enquiries
  5. Severability and Non-imputation
  6. Estates and Legal Representatives
  7. Spousal Liability
  8. Additional Reporting Period
  9. Advance Payment of Defense Costs



Associations Liability Insurance providesOptional Extensions for…


  1. Increase aggregate limit of indemnity
  2. Fraud and dishonesty
  3. Employment related matters
  4. Educators Liability (PI)




Claim: [Who] may claims against Directors, Officers, Secretary, Trustee, Committee members or Employees of an Association?


Employees – for employment related matters such as unfair dismissal, discrimination or sexual harassment or mismanagement



Regulatory Authorities – investigation, inquiry or prosecution by regulatory bodies such as the Companies Registry or the Inland Revenue Department



Public – for misrepresentation made in advertising material



Liquidator / Receivers – may bring civil actions on behalf of the association for alleged breaches of duties owed to the association



Members – for misleading statements or misstatements


[How] to obtain Quotation?


Client should complete the proposal form in order to provide information such as scope of activities or services, annual income, claims history, etc for underwriting consideration.


Terms and conditions are determined based on information provided (including but not limited to) some underwriting parameters:


  1. Association activities – sporting association and research institution are categories of high risks.
  2. Total asset and income – greater asset and income generally implies higher risk exposures
  3. Percentage of activities (based on income) derived from overseas – USA, Canada and Europe are relatively higher risks than Indonesia or Asia
  4. Claim history of client – nature, frequency and severity of loss
  5. Limit of liability and deductible required





[When] you need advice, you know [Where] to find me?


By: IMAM MUSJABCall: +628128079130 – Email:




Need Insurance?Ask the Expert!!


Find more…at


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2 Comments on “Association Liability Insurance – What, Why, When, Where & How?”

  • farrokh wrote on 27 May, 2010, 14:11

    I want to know how insurer cover a jewel surrounded in mine stone and must be removed from inside of mine stone safely?


  1. Marine Professional Negligence Insurance (MPI) Policy

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