While abuse claims and allegations are few in number for a social service agency, the cost in public reputation can be devastating.
When coupled with the cost to defend a claim, plus any potential payment for a judgment, an organization can be driven into the ground by just a single claim.
Recognizing that abuse comes in many forms – sexual, physical, and mental – is key when arranging policies, says NIF Group’s Paul Orlando, vice president of marketing and sales.
“Make sure the form you offer to your client responds to all these types of occurrences,” he continues. “Also, make sure your carrier will defend and indemnify on behalf of the entity should the need arise – not all carriers do.”
It is not unlikely for defense expenses to exceed the cost of an award during a claim.
“To protect your client, be sure the cost to defend is in addition to (or outside) the liability limit,” he says.
“Therefore, make sure abuse and molestation carries its own limit and aggregate. Also, loss prevention plays a critical role in preventing and defending abuse claims. Policies including background checks and control of ‘one on one’ exposure to vulnerable clients should also be in place and rigorously enforced.”
Finally and most importantly, Orlando suggests brokers ask: “Does the carrier have special handling of these types of claims, are they familiar with the coverage form and the defenses a social service agency can provide?
“This is when experience matters,” he says. “Abuse accusations, real and unfounded, all need proper coverage and defense. This coverage is an essential component to all social service proposals.”
