Simply speaking, a risk is any uncertainty about a
future event that threatens your organizations ability to accomplish its
21 pp 485-508
Accidents: basis for largest number of lawsuits.
Most accidents result from negligent act.
Claims based on board negligence in adopting
policies are possible.
Employment practices are a source of litigation.
Government requirements, e.g. tax code.
Risk Management Process
Step 1. Identify risk.
Step 2. Evaluate risk.
Step 3. Reduce risk to
Step 4. Obtain
insurance or make other financial arrangements as needed.
Step 5. Monitor
activities, the environment, and risk-control activities and revise as
Step 1: Identifying Risk
Ask others about
risks they see.
manuals for legal compliance.
Get risk check
list for nonprofits from insurers or risk management manuals.
competence of action and judgment for employees and volunteers.
with eye to hazards.
agent, lawyer, building inspector, director of similar organization
to join you in risk audit.
Step 2: Evaluating Risk
Review each risk
uncovered in step 1.
frequency of risk occurrence.
severity of loss.
IN ORDER TO:
Which risks can be tolerated.
Which risks require purchase of insurance.
Which risks can be reduced or controlled.
Which risks are too great to bear.
Step 3: Controlling Risk
prohibit the activity
change the activity so that the likelihood and severity of the risk are
the risk either intentionally or because no alternative exists.
at least the financial aspects of risk through contract or insurance.
Step 3A: Avoidance
that cannot be performed safely because personnel lack expertise.
that can be performed safely but may involve accident not covered by insurance.
Step 3B: Modification
guidelines with regular monitoring and enforcement.
for the job.
Responding to potential
plan in place prior to event.
Do not admit
do not admit liability.
Write down names
of any witnesses, take photos of scene.
notify insurer, attorney, sponsor.
recollections and encourage others to do the same.
Do not talk about
the incident without counsel.
Insurance can bring peace of mind. Dont
leave this to amateurs.
can protect itself from serious liability without insurance.
Peace of mind and
focus on your mission comes with the security insurance can provide.
The BEST advice is
to work with an insurance agent who knows the liability issues and the ways to
protect your organization.
Liability Insurance Mistakes to Avoid.
for nonprofit that sends personnel into field.
on traditional D & O policy to
liability covers employment disputes.
carriers each year to save a few dollars.
No coverage for
liability coverage for volunteers.
no coverage for claims by injured volunteers.
non-owned auto liability.
no coverage for finished products.