Associations Insurance FAQ Information
Associations Insurance FAQ. Associations are a collective group of members with similar or related interests or goals who join together to form an associated group. Their purpose is to pursue those interests.
The interest may be entertainment or financial in nature. Some may be formed to perform public service or to assist a charity, while others are educational in nature and were formed to inform or advance a particular philosophy, religion, trade, political or social issue. Some associations have extensive tangible assets while others have none.
Because associations are not immune to litigation, liability coverages often represent their greatest insurance need.
We wanted to provide a deeper dive into small business insurance to help our readers get a better understand of the commercial insurance policies they want and need with the Associations Insurance FAQ.
Read the Associations Insurance FAQ to learn what type of commercial insurance coverages are right for your association - including liability, property, workers compensation and other specialty policies.
What Is An Association?
According to Webster's Dictionary, an association is, "an organization of persons having a common interest."
Associations include - but are not limited to - the following types of organizations:
- Car Clubs
- Fraternal Orders
- Goodwill Industries
- Labor Unions
- Parent-Teacher Organizations
- Red Cross Chapters
- Salvation Army
- Social Service Organizations
- Veteran Groups
- Volunteers of America
- Youth Groups
You can reference the Insurance Definitions, Dictionary And Glossary to better understand the commercial insurance policy terms and language used in our Small Business Insurance FAQs.
What Kinds Of Insurance Do Associations Need?
- At the minimum, associations need general liability insurance.
- If they have employees they will need workers compensation in most states.
- If they have vehicles registered to the business, or use vehicles for the business purposes, they will also need commercial auto.
- There are also other specialty coverages and endorsements that might be needed based on their operations.
Following are some suggested commercial policies and coverages applicable for associations:
You can skip to the following types of associations small business insurance policy coverage types using these links:
Associations Commercial Insurance Policies:
- What kinds of commercial package policies do associations need?
- What kinds of commercial property insurance do associations need?
- What kinds of inland marine insurance do associations need?
- What kinds of crime insurance do associations need?
- What kinds of commercial liability insurance do associations need?
- What kinds of professional liability insurance do associations need?
- What kinds of commercial auto insurance do associations need?
- What kinds of workers compensation insurance do associations need?
- What kinds of excess and umbrella insurance do associations need?
- What kinds of specialty insurance do associations need?
What Kinds Of Commercial Package Policies Do Associations Need?
Package policies are the most convenient way to combine coverages. Even when an association does not need property coverage, a package policy can still be used as a way to conveniently combine liability, crime and inland marine coverages.
Associations often do not qualify for a businessowners policy, either because there is no property exposure or because there is extensive off-premises liability exposures, but there are important exceptions such as condominium associations.
Types Of Associations Package Policies:
- Businessowners Policy (BOP)
- Commercial Package Policy (CPP)
What Kinds Of Commercial Property Insurance Do Associations Need?
Some associations' property exposure consists only of mobile property. This exposure is best covered using inland marine coverage forms. However, others own buildings or other property and, therefore, should use the property coverage forms. Before deciding on the best coverage forms to use, a complete property inventory should be developed to determine who owns the property, where it is located, the nature of the property, and the types of losses to which the property is exposed.
The building and personal property form is the most widely used property coverage form. Condominium associations and commercial unit-owners can use the building and personal property form, but they are better served by using one of the condominium coverage forms.
An association should carefully consider how it would continue operations following a property loss. Some may have no interruption at all, in which case time element coverages are not necessary. Some may continue by incurring additional costs, in which case extra expense coverage is sufficient. However, if operations will be suspended until the property is restored, business income coverage should be considered. Many associations have long-term leases which means that leasehold coverage should be considered.
Types Of Property Coverages:
- Business Personal Property
- Personal Property of Others
- Improvements and Betterments
What Kinds Of Inland Marine Insurance Do Associations Need?
If an itemized property inventory reveals items that are mobile in nature, a scheduled property inland marine coverage form should be used in place of the property coverage forms because it provides in-transit and off-premises coverage in addition to the on-premises coverage.
Other coverages should be considered based on the needs of the particular associations. Many inland marine forms include earthquake and flood coverage.
Types Of Inland Marine Coverages:
- Accounts Receivable Coverage
- Bailee Customers Coverage
- Commercial Articles Floaters
- Contractors Equipment Coverage
- Difference in Conditions (DIC) Coverage
- Electronic Data Processing Equipment Coverage
- Fine Arts Coverage
- Scheduled Property Coverage
- Signs Coverage
- Transportation Coverage
- Valuable Papers and Records Coverage
What Kinds Of Crime Insurance Do Associations Need?
The commercial crime coverage part includes up to seven coverages. One or more can be selected by entering a limit for it on the declarations. While all the coverages available may be appropriate for a given association, employee theft coverage should always be at the top of the list. If this is the only coverage needed, the employee theft and forgery policy should be considered due to its simplicity and the fact that it provides only employee theft and forgery coverage. An endorsement is available to extend coverage to include volunteer dishonesty.
Types Of Crime Coverages:
- Computer and Funds Transfer Fraud Coverage
- Employee Theft Coverage
- Forgery or Alteration Coverage
- Inside The Premises-Robbery or Safe Burglary of Other Property Coverage
- Inside The Premises-Theft of Money and Securities Coverage
- Money Orders and Counterfeit Money Coverage
- Outside The Premises Coverage
What Kinds Of Commercial Liability Insurance Do Associations Need?
At some point, association members will interact with the general public. Liability coverages provide protection for the association for loss or damage to third parties resulting from the interaction with the public done by its members or employees in the name of the association.
Types Of Liability Coverages:
- Commercial General Liability (CGL) Coverage
- Special Events Liability Coverage
What Kinds Of Professional Liability Insurance Do Associations Need?
Associations that provide professional services may be accused of bodily injury or property damage due to the rendering or failure to render professional service. These claims are based on malpractice, error or mistake in the performance of professional duties. Separate professional liability coverage should be considered and purchased for these activities.
Types Of Errors And Omissions (E&O) Coverages:
- Miscellaneous Medical Professional Liability Insurance Coverage
- Physicians, Surgeons and Dentists Professional Liability Coverage
What Kinds Of Commercial Auto Insurance Do Associations Need?
Associations may or may not actually own vehicles. However, they may have non-owned exposures if employees use their own vehicles on association business or a hired exposure if they rent or lease vehicles when out of town on business. An association may have a garagekeepers exposure if valet parking is provided at association events.
Types Of Business Auto Coverages:
- Auto Medical Payments
- Business Auto Coverage
- Collision Coverage
- Comprehensive Coverage
- Garagekeepers Coverage
- Hired & Non-owned Auto Coverage (HNOA)
- Uninsured/Underinsured Motorists Coverage
What Kinds Of Workers Compensation Insurance Do Associations Need?
Most employers are required by state statute to provide coverage through a workers compensation policy for on-the-job injuries sustained by their employees. An association with paid employees is not exempt from this requirement and must purchase the necessary coverage.
If a subcontractor is used to provide services, that subcontractor should provide a certificate of insurance to verify that the required coverage has been purchased for all of its employees or the association may be held responsible for injuries as a statutory employer.
Types Of Workers Comp Coverages:
- Stop-Gap or Employers Liability Coverage
- Workers Compensation and Employers Liability Coverage
What Kinds Of Excess And Umberlla Insurance Do Associations Need?
Associations must consider their liability exposures when determining the total limits of liability insurance needed. If their operations include direct contact or involvement with children, disabled or other vulnerable parties, higher coverage limits should be considered through the use of an excess or umbrella liability policy.
Types Of Excess Liability Coverages:
- Excess Liability Coverage
- Umbrella Coverage
What Kinds Of Specialty Insurance Do Associations Need?
Associations may provide services, sponsor events or possess information that can add to their exposures that are not covered by most standard policies. Operations should be evaluated and an inventory made to determine if any of the following policies and coverages should be considered.
Types Of Specialty Coverages:
- Business Legal Expense Coverage
- Cyber Liability Coverage
- Directors and Officers Liability Coverage
- Electronic Data Liability
- Environmental Impairment Liability Coverage
- Fiduciary Liability (Pension, Welfare and Employee Benefit Funds) Coverage
- Identity Theft Insurance Coverage
- International Insurance Coverage
- Lead Paint Contamination Coverage
- Media/Communication Liability Coverage
- Recreational Trail Liability Coverage
- Solar Energy System Coverage
- Underground Storage Tank (UST) Liability Coverage
- Unmanned Aerial Vehicles (UAV) (Drones)
- Weather Coverage
Associations Insurance FAQ - The Bottom Line
There are many commercial insurance policies available for Associations. To find out what types of coverage your business needs, speak to a professional insurance broker with experience in insuring Associations.
Frequently Asked Questions By Industry
Learn about the coverages available for specific industires with the Insurance FAQs below:
- Artisan Contractors
- Automotive Sales and Service
- Aviation Risks
- Boats and Yachts
- Construction Contractors
- Eating and Drinking Establishments
- Educational Institutions
- Farm and Ranch
- Financial Institutions
- Food Processing Plants
- General Liability
- Government, Institutions and Utilities
- Health Care Providers
- Lodging Places
- Logging, Mining and Quarries
- Printing Services
- Real Estate and Rental Property
- Recreation and Sports
- Retail Food and Beverage
- Retail Stores
- Services Businesses
- Trucking and Transit
- Warehouses and Storage
- Wholesalers and Distributors