Parent Teacher Organization Insurance Policy Information
Parent Teacher Organization Insurance. Charities are subject to the same level of scrutiny and bureaucracy as commercial businesses. Just like company directors, trustees and parent teacher organization managers are legally responsible for their parent teacher organization's activities; from finance to health and safety, volunteers' welfare, to the promises a parent teacher organization makes.
Parent-teacher organizations (PTO) or associations (PTA) are designed to promote the involvement of parents and families in the school system in which their children are being educated. Joint membership of teachers and families within the organization provides a forum for discussion of school policies and reform, as well as funding for special school projects.
Some parent-teacher organizations operate concession stands at athletic events while others may be responsible for the social activities of students. Financial backing is through membership dues, fundraisers, and donations.
Parent-teacher organizations (PTOs) are a staple and essential part of any school. They host wonderful events for students and parents that really bring the entire community together. If you're the head of a PTO, there's no doubt that you spend a lot of your time organizing and planning all of the picnics, breakfasts, book fairs, and other events that you host.
In all your planning, you likely consider things that could go wrong and make accommodations for mishaps; however, you might not think much about the need for parent teacher organization insurance coverage - but you really need to.
There are definite risks associated with a PTO that could put you, other members, the school, and anyone else who is involved with the organization in jeopardy of legal trouble.
parent teacher organization insurance (PTO) protects your association from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked PTO insurance questions:
- What Is Parent Teacher Organization Insurance?
- How Much Does Parent Teacher Organization Insurance Cost?
- Why Do PTOs Need Insurance?
- What Type Of Insurance Do Parent-Teacher Organizations Need?
- What Does Parent Teacher Organization Insurance Cover & Pay For?
What Is Parent Teacher Organization Insurance?
Parent Teacher Organization (PTO) insurance is a type of liability insurance designed specifically for parent-teacher organizations and other similar groups. It provides coverage for various types of risks that may arise from PTO activities and events, such as accidents, property damage, and other liabilities.
The insurance may also cover legal fees, medical expenses, and other costs associated with incidents that occur during PTO-sponsored events. This insurance is designed to protect the organization, its members, and volunteers from financial losses due to unexpected incidents and to ensure that the PTO can continue its activities and programs without interruption.
How Much Does Parent Teacher Organization Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small PTOs ranges from $37 to $49 per month based on location, size, payroll, sales and experience.
Why Do PTOs Need Insurance?
Like any other event that brings people together, there are several potential issues that could arise. A volunteer could fall off of a ladder while setting up a display, a carnival game could malfunction and injury a child, or someone's personal property could be damaged or stolen, for example.
In the event that the unthinkable happens, you could be held legally responsible for the damages. Someone could file a lawsuit against your organization and you, personally, which could end up putting you in financially ruin.
In order to protect yourself from peril, having the right parent teacher organization insurance in place is absolutely essential for a parent-teacher organization.
In the event that something does go wrong and someone takes legal action, your insurance coverage will help to pay for the cost of damages, as well as defense fees.
What Type Of Insurance Do Parent-Teacher Organizations Need?
There are several types of insurance coverage that a PTO should have in place. Below, we'll highlight some of the most basic types of parent teacher organization insurance policies that you should invest in:
- General Liability - This is the most basic type of insurance coverage that a PTO should carry. It protect you from any lawsuits that may be filed against your organization in the event that someone is injured or if someone's property is damaged. For example, should a student sustain an injury as a result of a faulty game at a carnival or if a shelf collapses on someone at a book fair, general liability insurance will help to cover the cost of any injuries and legal defense fees.
- Professional Liability - Also known as errors & omissions insurance (E&O), this type of coverage protects the board members of a parent-teacher organization from any wrongful acts legal suits that may be filed. For instance, if a parent sued your organization, claiming that the charitable funds that were raised were spent inappropriately, or if someone filed a claim stating that you misrepresented the school or the PTO, professional liability coverage would help to pay for your legal defense fees. In the event that you are required to pay out any damages, an E&O policy would also help with the cost.
- Commercial Property - You may not need to have property insurance for the school or wherever else you may be hosting an event, as these institutions should have their own property insurance policies in place. However, you should consider investing in a policy that will protect any property that is related to the PTO; items that you may be auctioning off or selling, supplies that you've collected for fundraisers, and gifts that have been donated for raffles, supplies for your school store, audio visual and entertainment equipment (TVs, popcorn makers, stereos, etc). A property insurance policy will cover any property that is related to the PTO in the event that it is stolen, lost, or damaged.
- Bonding - As a parent-teacher organization, you rely on funds to make all of those wonderful events that you host a reality. It's important to carry bond insurance, as it will protect your organization in the event that someone steals your funds. For instance, if the treasurer of your PTO, someone who volunteers to help with an event, or a vendor that you are working without embezzles your money, bond insurance would help to replace the stolen funds.
These are just some of the types of parent teacher organization insurance policies that parent-teacher organizations should consider investing in. With these policies in place, you can protect yourself, the members of your PTO, and the entire organization from any mishaps that may arise.
How Much Coverage Should MY PTO Have?
The amount of coverage you should carry for each policy depends on a variety of factors. The size or your PTO, the amount of funding you have, and the types of events that you host are just some of the factors that should be taken into consideration when determining how much coverage you should have for each parent teacher organization insurance policy.
PTO's Risks & Exposures
Premises liability exposure is limited since activities take place on school property with full permission of the school. However, while the statute of sovereign immunity may apply to the schools, that same protection may not apply to activities conducted by the parent-teacher association. Any fundraiser must be evaluated based on the potential for injuries.
If services are provided by outside contractors, certificates of insurance must be obtained and maintained. Ownership for any items bought for the school, such as playground or sports equipment, should be immediately transferred to the school to eliminate liability for injuries.
Directors and officers exposure could be moderate due to activities sponsored by the association. Policies and procedures should be published and consistently followed, especially as they relate to membership, membership revocation, the election of officers, and removal of officers.
Property exposure is generally nonexistent because the group does not own anything. Most groups that purchase items for use in the schools pass ownership on to the school immediately upon purchase. If ownership is retained, storage and security of items should be reviewed.
Crime exposure is from employee dishonesty and theft of money and securities from dues and the money collected at fundraisers. As parent-teacher associations have no employees, coverage for volunteers and committee persons must be included. Parent-teacher associations are unlikely to perform background checks on members handling money.
Precautions against theft include having more than one person attending the cash drawer at all times and a separation of duties between persons handling money and reconciling bank statements. Money should be regularly collected and moved away from the collection area, preferably to a safe. Regular deposits must be made to prevent a large buildup of cash.
Inland marine exposure is generally nonexistent since most items are immediately transferred to the schools for their use. However, if the group keeps equipment to be used for fundraisers such as popcorn machines, games, and other mobile items, they should be insured using a special or miscellaneous floater.
Commercial auto exposure is limited to hired and non-owned automobile for members running errands on behalf of the association.
What Does Parent Teacher Organization Insurance Cover & Pay For?
Parent Teacher Organizations (PTOs) can face a variety of lawsuits due to different reasons. Insurance policies can provide protection and financial support in these situations. Here are some examples of why PTOs might be sued and how insurance can help:
Personal Injury: If someone is injured during a PTO-sponsored event, the organization may be held responsible. General liability insurance can protect PTOs in such cases by covering legal fees, medical expenses, and potential settlements.
Property Damage: If a PTO event causes damage to school property or someone's personal property, the organization might be held liable. General liability insurance can also cover expenses associated with property damage claims, including repair or replacement costs and legal fees.
Discrimination: PTOs can face lawsuits if they are accused of discriminatory practices, such as excluding certain individuals from participating in events or denying them membership. Employment Practices Liability Insurance (EPLI) can help cover legal defense costs, settlements, and judgments in cases of alleged discrimination.
Misappropriation of Funds: PTO members may be accused of embezzling or misusing organization funds. Directors and Officers (D&O) liability insurance can help cover the costs of legal defense and potential settlements in cases involving alleged financial mismanagement.
Defamation: PTOs can be sued for defamation if they make false statements about an individual or another organization that causes harm to their reputation. General liability insurance often includes coverage for personal and advertising injury, which can help pay for legal defense costs and potential damages in defamation cases.
Breach of Contract: PTOs can be sued for failing to fulfill their contractual obligations with vendors, partners, or service providers. Professional liability insurance, also known as errors and omissions (E&O) insurance, can cover legal defense costs and potential damages in cases of alleged contract breaches.
Cyber Liability: If a PTO's digital systems are hacked, leading to data breaches or other cyber incidents, they may face legal actions from affected individuals. Cyber liability insurance can help cover the costs of legal defense, settlements, and public relations efforts to mitigate reputational damage.
By carrying appropriate insurance policies, PTOs can mitigate the financial impact of potential lawsuits and protect their assets, ensuring they can continue their mission of supporting schools and students.
Commercial Insurance And Business Industry Classification
- SIC CODE: 8641 Civic, Social, and Fraternal Organizations
- NAICS CODE: 813410 Civic and Social Organizations
- Suggested Workers Compensation Code(s): 8810 Clerical Office Employees NOC
8641: Civic, Social, and Fraternal Organizationsd
Division I: Services | Major Group 86: Membership Organizations | Industry Group 864: Civic, Social, And Fraternal Associations
8641 Civic, Social, and Fraternal Organizations: Membership organizations engaged in civic, social, or fraternal activities. Membership sports and recreation clubs are classified in Industry Group 799, and insurance offices maintained by fraternal organizations are classified in Insurance, Major Group 63. Homeowner, tenant, and condominium associations primarily engaged in managing real estate are classified in Real Estate, Industry 6531.
- Alumni associations and club
- Bars and restaurants owned and operated for members of
- Booster clubs
- Business persons clubs, civic and social
- Civic associations
- Community membership clubs, other than amusement and recreation
- Condominium associations, except property management
- Fraternal associations, other than insurance offices
- Fraternal lodges
- Fraternities and sororities, except residential
- Homeowner associations, except property management
- Parent-teacher associations
- Singing societies
- Social club, membership
- Tenant associations, except property management
- University club
- Youth associations, except hotel units
Parent Teacher Organization Insurance - The Bottom Line
To find out more about insurance options for your PTO, speak with a reputable insurance broker to learn about the business insurance options available.
Additional Resources For Non-Profit Insurance
Find useful articles on business insurance for non-profit 501(c)(3) organizations, charities and associations.
- Animal Shelter & Pet Rescue
- Classic & Collector Car Clubs
- Fraternal Organization
- Goodwill Insustries
- Labor Union
- Parent Teacher Organization
- Public Administration
- Red Cross Chapters
- Salvation Army
- Social Work Services
- Veterans Groups
- Volunteers of America
- Youth Groups
- Specialty Community Service Organizations
- Specialty Nonprofit Agencies
The non-profit industry is an essential sector of society that plays a crucial role in addressing social issues, providing vital services, and promoting community development. Non-profits rely on donations, grants, and volunteer work to fund their operations, and any financial loss or liability can significantly impact their ability to serve their mission.
Insurance can protect non-profits from unexpected financial losses, accidents, and legal liabilities that can arise from their operations. For example, a non-profit organization may need insurance to cover damages to their property, injuries to volunteers or employees, or legal costs associated with lawsuits.
Non-profits also face unique risks such as loss of donations, damage to reputation, and loss of funding. Business insurance can help mitigate these risks by providing coverage for financial losses, reputational damage, and other non-tangible losses.
In addition, non-profits often work with vulnerable populations, such as children, the elderly, or individuals with disabilities. Insurance can protect non-profits from liabilities arising from the care and services they provide to these populations.
Overall, commercial insurance is an essential component of risk management for non-profit organizations. It helps protect the organization's financial stability, reputation, and ability to fulfill its mission and serve its community.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Computers, Valuable Papers and Records, General Liability, Directors and Officers Liability, Employee Benefits, Professional, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Fine Arts, Musical Instruments, Commercial Articles Floater, Computers, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.