Health and Human Services Insurance Coverage - By: Jane Muder

Like most business, health and human services organizations, social service agencies, and other non-profit organizations must purchase basic insurance packages in order to operate legally and effectively. Some of the insurance packages a human services agency or non-profit organization will purchase are common to all businesses: worker's compensation, umbrella insurance, and business insurance. However, the non-profit nature of health and human services agencies, combined with the special coverage needs specific to these agencies' staff and the populations they serve, will often require specialized insurance coverages and targeted choices in insurance brokers.

Directors and Officers Insurance Coverage

Most health and human services and non-profit organizations will require Directors and Officers Liability Insurance, or “D&O insurance.” The very nature of non-profit and social services jobs – services done for the public good, and often, specifically for at-risk, under-served, or challenging populations -- makes lawsuits against directors distinct possibilities, because of their daily agency duties and roles. D&O insurance provides coverage for non-profit or social service agency directors if they are sued for job-related activities or conduct.

As in the for-profit world, harassment lawsuits and discrimination grievances are prevalent in non-profit organizations. These types of lawsuits pose some of the greatest threats possible to non-profit and human service organizations: actions brought against directors and officers present great financial risks to agency boards or investors. In the event that a suit is brought against a social service agency director or officer, a D&O insurance coverage program drastically lowers the risk that any one board member will lose his or her personal assets as the result of a lawsuit. This type of insurance protection is so important that D&O is a standard requirement when assembling a board of directors.

D&O insurance plays several other important roles in a non-profit or health and human services organization. It can protect an organization in the event that a director or officer inadvertently releases classified or proprietary company information in good faith. This type of insurance can also protect the company in the event of a questionable hiring, termination, or promotional decision. Directors and Officers Liability Insurance is also beneficial in suits regarding how the non-profit manages its investment portfolio(s) and can be an asset in “conflict of interest” legal charges brought against the non-profit.

Unemployment Insurance

Most for-profit companies pay a certain premium percentage each month for unemployment insurance, an essential type of coverage that is legally mandated in order to own or operate a business. In the for-profit world, each time a former worker successfully files for unemployment compensation, the unemployment insurance premiums and taxes for all employees go up. This is especially deleterious to small for-profit entities, because the smaller the company is, the higher the per-employee cost will jump.

Unlike their for-profit brothers, non-profit companies can pay state taxes only for unemployment claims that are actually paid out. It's an unfortunate truth that many social service agencies and non-profit organizations are unaware that they are eligible for tax reimbursements. Those health and human service organization employees who are responsible for unemployment benefits administration should consult with their unemployment insurance brokers to register as “reimbursing employers.” Then, rather than paying excess taxes on social service unemployment claims, non-profit and social service agencies can use the money for the betterment of their organizations.

Employment Practices Liability Insurance

A cursory reading of the business section of the local newspaper will reveal that lawsuits against employers are common, even on the rise, depending upon the industry. Reasons for such suits can include, but are not limited to: sexual harassment; discrimination on the basis of race, faith, or sexual orientation; wrongful termination, and more. Employment Practices Liability Insurance (EPLI) provides non-profit and human service organizations with coverage in the event of lawsuits.

Other types of human service and non-profit insurance coverages

Many non-profits and human service agencies offer specialized care or community services. Food banks, for example, provide nourishment to those who cannot afford complete meals from their own means. Jewish community centers lend cultural programs, childcare, and often, fitness and recreational opportunities to both Jewish and secular populations. YMCA branches offer services ranging from temporary sheltering; to fitness opportunities and youth day camp, to job training and placement programs. Group homes might provide services for the frail elderly; the mentally ill, or adults with Down Syndrome. Accordingly, each non-profit must consider its risks carefully and purchase insurance accordingly. Coverage options range from child abduction liability to patient molestation and abuse coverage to insurance for clinic volunteers and helpers.

Before a non-profit or health and human services organization commits to any insurance package, however, they must consult with experienced insurance brokers to determine the coverage packages that are most suitable for specialized organizational needs.

About the Author

Allied Insurance Brokers provides risk management strategies and insurance for health and human services, social service agencies, and other non-profits. The company offers other specialized packages and agent and broker insurance services, as well. For more information, visit the company's Web site, http://www.alliedinsbrokers.com.

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