So how much could a data breach cost your firm? An average of $204 per customer record that is lost or stolen, according to the Ponemon Institute’s First Annual Cost of Cyber Crime Study, published in July 2010 and including both private and public enterprises. Fifteen percent of data breaches are inside jobs, perpetrated by employees or contractors with access to the system, according to Kroll, a London-based consultancy firm.

The crimes vary, sometimes resulting from a disgruntled employee and other times as a result of a widespread theft operation. The Ponemon study lists several common cyber crimes, including:
-Creating and distributing viruses
-Posting private company information in a public forum online
-Compromising online bank accounts
-Theft of intellectual property
-Identity theft.

The first step in combating such crimes is a formal risk management plan. Creating an effective plan takes tremendous resources, and it must be constant monitored. Large firms are more likely to have complex risk management tools and programs in place to identify and manage exposures. A smaller business is less likely to be able to afford the time and money needed for such a program.

Insuring Cyber Risk

Cyber crimes have been around for several years. Insurance companies have developed policies designed to cover many different exposures. Some policies are specifically designed to cover first-party exposures while others address third-party exposures. Some policies cover both.

Businesses must evaluate cyber risk from both a first-party and third-party perspective. First-party losses are costs that cover the company’s own expenses caused by a cyber crime. Examples of such costs may include notification and credit monitoring for compromised individuals (note that some policies consider notification costs as a third-party coverage), data restoration, system repair and lost income.

Traditional first-party insurance policies typically limit or exclude coverage for cyber crimes. For this reason, a cyber insurance policy that covers first-party costs should coordinate with other first-party insurance policies. Such policies may include equipment breakdown, crime and other property insurance.
When a cyber crime occurs against the first party’s system or operations, third parties may be affected. Examples of third-party exposures include: infringement of copyright, invasion of privacy, unauthorized access to confidential information, software that causes the third party’s system to fail, and theft of identity, medical or other private data.

Third-party costs may include defense costs and judgments or settlements for lawsuits brought by customers, employees or others. Costs may also result from an investigation brought by a regulatory body.
Traditional third-party insurance policies typically limit or exclude coverage for cyber crimes. For this reason, a cyber insurance policy that covers third-party costs should coordinate with other third-party insurance policies. Such policies may include professional and general liability, technology and other liability insurance.

Important Considerations
When reviewing coverage for cyber crime, consider the following:

-Is the liability coverage sufficient to assist with costs associated with defense, settlements and judgments that the business is legally obligated to pay?

-Is the coverage for so-called “remediation” sufficient? Remediation refers to costs associated with a data breach. These costs may include the cost of investigation, consumer notification, credit monitoring and public relations and may be mandated by state law. Currently, 47 states have privacy and/or breach notice laws requiring businesses to make timely notifications to consumers when a breach has occurred, regardless if any damage is actually done. The laws differ by state. Many such laws require the first party to pay notification costs, such as mailings, setting up a website and providing a consumer hotline. These efforts cost an average of $9 per customer. Many businesses also offer affected customers access to credit-monitoring services that range from $10 to $60 annually per person.

-Is the coverage for the cost to investigate and close the breach sufficient? Such costs may include hundreds of dollars per hour for computer forensics experts and attorneys and the cost of installing new systems.

Don’t Go It Alone
There is no “standard” cyber insurance policy. A thorough examination of the policy’s terms with your Trusted Choice® insurance professional is a necessary step to identify potential gaps in coverage. Your Trusted Choice® agent will help you determine your exposure and if there is an enhancement available to one of your firm’s existing policies. If such an enhancement is not available or proves insufficient, your agent will assist you in determining which policy will best protect your firm from costs associated with cyber crime.

Unauthorized file sharing is easy, cheap (meaning free) and illegal. Consider the recent case of BMG Music et al v. Cecilia Gonzalez. In this case, a federal court ruled that the illegal downloading of songs by a consumer (as in the individual doing the downloading, not the entity responsible for the file-sharing platform) constituted copyright infringement. The damages awarded against her totaled $22,500—for downloading 30 songs at $750 penalty per song. Seem steep? It could have been much worse. The defendant had actually downloaded 1,370 songs. Federal law permits an assessment of $30,000 per song. Had they chosen the full course of action, damages against Gonzalez in this case would have resulted in over $41 million!

This case is proof that the federal government intends to secure the integrity of copyrights, even if it means rendering judgment against individual consumers. The bad news for these consumers is that such a judgment will not be covered by homeowner’s insurance.

Personal liability afforded under a typical Homeowners insurance policy does not cover liability claims that do not involve bodily injury or property damage arising out of an “occurrence.” Since “occurrence” constitutes an accident or exposure to harmful conditions, it is not likely the insurance company will look any further to find a reason to provide you with coverage (downloading that latest Springsteen track for free was no accident).

Even if you did jump that hurdle, you’re still fighting an uphill battle. Property damage constitutes physical injury to tangible property: ripping off mp3 files hardly fits the bill.

Even homeowners with personal injury liability (which extends liability insurance to pay claims such as libel, slander, and violation of privacy rights) are exposed: This insurance says nothing of covering claims of copyright violation, nor will it cover criminal acts.

This information should serve as a somber reminder that households downloading illegal files are in danger of incurring a large out-of-pocket expense that no personal insurance intends to pay. Parents should be especially careful; in many households it is not mom or dad downloading the copyrighted music. A look at the music library on many children and teenager’s computers could shock you—they could have hundreds or thousands of songs. If your children are file-sharers, check their preferred sources for legitimacy and remind them why this is important.

When it comes to downloading music, “free” can come with a big price. Enjoy the tunes but proceed with caution.

One party hostess recalled a disastrous event that involved hot oil, alcohol, a paper tablecloth and fireworks:

“The oil to fry the turkey was too hot and too full (yes, we fry our turkeys in Texas). Maybe it had to do with the over-served [read: one too many alcoholic beverages] cook. But once the turkey went in, the oil bubbled over, caught the paper tablecloth on fire, and lit the grass on fire.”

The grass fire then ignited a pile of fireworks, which were supposed to be on the porch. This in turn “led to one huge fireball, screaming crying children who will probably never recover from the panic that was set throughout, which then led to roof catching on fire.”

The damage tally was: one home partially destroyed, several cars damaged by smoke, a missing dog, $2,500 worth of poorly timed fireworks and three acres of burned grass. The lessons learned, reported the wiser hostess: “We now monitor everyone’s booze intake, park cars far away, and only have one person know where the fireworks are. And I now cook the turkey with fire extinguishers nearby.”

Summer is truly party time in New Jersey. But NJ homeowners should be aware of the risks associated with these get-togethers. Before reviewing safety tips, let’s look at three common risks for which a homeowner might need insurance coverage:

Liquor liability: Summer parties can be a breeding ground for drinking-and-driving accidents. Most NJ homeowners know that they bear some responsibility if a guest becomes impaired after consumer alcoholic drinks at the homeowner’s house, and then causes a car accident. If the party-giver is sued, however, his/her homeowners and NJ automobile insurance policies may not provide liability coverage. (Keep in mind that the legal defense against a claim is another significant expense for anyone who is sued in such a circumstance.)

Changes to homeowners insurance standard contracts in 2000 may limit the coverage available under a homeowners policy. Homeowners might be well served to check their homeowners and auto insurance policies (contacting their agent, if necessary) to determine what protection they may have.

Personal accidents on the homeowner’s property: A homeowners policy and an excess liability policy (dubbed an “umbrella” policy) provide broad protection for accidents on the party host’s property. For instance, if a guest tumbles down the steps of an outdoor deck or a child is burned by the outdoor grill, the homeowners policy would pay medical costs for the guest (and, should a lawsuit follow, likely would pay the costs of defending against the lawsuit and damages awarded in the case).

No one, of course, wants to see such events occur, but accidents do happen. Homeowners coverage is designed to “make whole” a homeowner who is facing a liability claim due to an accident on his or her property.

Property damage liability: When guests drive to your party and park their cars at your home, the homeowner assumes risk. The possibilities of property damage range from a simple dent from a stray baseball, to a young driver releasing the parking brake and rolling the car into a tree, to an impaired driver going for a joy ride and damaging the car. A different example of property damage is the theft of a guest’s purse/wallet or valuable articles from the party-giver’s property.

Homeowners coverage pays for damage to another person’s property, if the homeowner is held liable. A homeowner’s negligence and omissions (i.e., failing to take steps that might have prevented an incident) are reasons that he or she can be found liable for damage to another person’s property.

To prevent accidents, consider some sensible safety precautions:

Grilling
Some 5,000 people are injured by charcoal, wood-burning and propane grill fires each year, according to the U.S. Fire Administration of the Federal Emergency Management Administration. Good safety practices include:

-Before using a propane gas grill, check the connection between the tank and the fuel line. Make sure the Venturi tubes (where the air and gas mix) are not blocked, and check hoses for cracks or damage.

-Never use a propane barbecue grill on a balcony, terrace or roof. And never grill/barbecue in enclosed areas, as deadly carbon monoxide can be produced.

-Keep a fire extinguisher or a source of water (a garden hose or four-gallon pail of water) near an outdoor grill or barbecue.

-While barbecuing, don’t wear loose clothing. Use long-handled barbecue tools and/or mitts that are flame resistant.

-Don’t squirt flammable liquids onto an open flame.

-Don’t leave a grill unattended.

-Keep matches and lighters away from children. Supervise children around outdoor grills, which are objects of curiosity.

-If using a charcoal or wood fire, dispose of hot coals properly by soaking them with water, then stirring to ensure that fire is extinguished. Never place them in plastic, paper or wooden containers.

-Keep alcoholic beverages away from the grill since they are flammable.

Drinking
Liquids containing alcohol cause the human body to lose more fluid, say health educators. So summertime drinking in the sun or heat can present hazards to health, including impaired judgment, balance and coordination. Consider these safety tips if serving:

-Use designated drivers.

-Make non-alcoholic beverages as available as alcoholic drinks.

-Stop serving alcohol before the party ends.

-If children are attending the event, remember that alcohol may seem more available to them at a party.

Dining outdoors
Food-borne illnesses favor the hot conditions found at outdoor events where food is not refrigerated or may be undercooked. The U.S. Department of Agriculture offers food safety tips:

-Cook foods thoroughly to safe minimum internal temperatures.

-Keep hot foods hot and cold foods cold. Hot foods should be heated and maintained at 140 °F or warmer with chafing dishes, slow cookers, and warming trays. Cold foods should be held at 40 °F or colder. Maintain cold by placing food dishes in bowls of ice or in a cooler.

-Live by the “two-hour rule”: Foods should not sit at room temperature for more than two hours.

We like a summer party as much as anyone, especially when they’re safe. Contact us for more information about what homeowners and umbrella coverage for the home where you host your parties.

Unfortunately, even with a hard-earned diploma, many leave for the working world without knowledge of one of life’s critical products: insurance. While every individual’s needs are unique, here are five basic insurance coverages that all college grads should consider, to see if they apply:

Auto insurance A shiny new car, whether owned or leased, holds appeal for newly employed college grads. Auto insurance helps cope with the expenses of accidents, vandalism or theft.

A lender or leasing company that finances the vehicle will require auto insurance. Car accidents can create large liabilities for a driver, so the liability portion of auto coverage helps protect the bank account. Plus, auto insurance covers many legal expenses if a driver is sued.

Health insurance Following graduation, individuals may or may not be covered by a parent’s health insurance policy. Many college grads will need coverage through an employer or an individual health insurance policy. Individual policies can be pricey and differ significantly in coverage, so it is important to seek the advice of an experienced insurance advisor.

Homeowners or Renters Insurance College grads starting out may not own a home yet, but may rent a residence. To make sure their possessions are protected, homeowners and renters insurance offer comprehensive coverage whether at home or traveling. Liability insurance included in renters and homeowners coverage also helps protects against the risk of being sued. There usually are limitations on renters coverages within a group house—a typical post-graduate arrangement—so it is important to understand the details of a policy.

Life Insurance New grads may find a job with an employer that offers group term life insurance coverage. However, those with children may find it worthwhile to buy additional term life insurance or permanent life insurance, which builds cash value over time.

Disability Insurance This is a vital but often-overlooked insurance coverage. It provides income when a person is injured or disabled, whether on the job or off. Your insurance advisor can calculate the right amount of coverage to help a person live while recovering.

The new college grad may want to lean financially on parents’ insurance coverages as long as possible. While that makes sense, it’s not always viable. For instance, almost all auto insurance companies will require an owner or lessee of a car to carry their own coverage. In NJ, health insurance plans can cover an insured’s children up to the age of 30 if they meet certain eligibility requirements. Otherwise, an individual will need their own health insurance coverage.

There are plenty of insurance policies out there that a new grad won’t need, unless there are special circumstances, such as air travel insurance, contact lens insurance or cancer insurance. Typically, it is better to have comprehensive policies like renters or health.

Parents of new graduates also should take this time to review their insurance portfolios, as there may be opportunities to reduce their premiums when child moves out of the home.

We can help new grads and their families navigate these waters, to provide sensible coverage that won’t break the bank.

For more information, contact us and/or download the free “Trusted Choice® Graduate’s Guide to Insurance” at www.TrustedChoice.com.

Statutes and Paperwork
A thorough review of your master deed (often called declarations or “docs”) is necessary to adequately insure your condo. Unfortunately, these docs can be multiple pages of legalese that make it difficult to decipher insurance requirements. Further, your association’s bylaws may contain important insurance information. And if it wasn’t confusing enough already, some states have statutes which dictate condo insurance requirements. For these reasons, a best practice is to review your insurance needs with a trusted insurance advisor, like us – your Trusted Choice® independent agent.

Definition of Unit
Your docs should contain a definition of “unit.” This term is often used to define the boundaries of the property that you individually own vs. common property that is owned by the association or other entity. For example, boundaries may include the space you occupy as well as all real property located between the unfinished walls, floor and ceiling. Note that there is no standard definition of unit: All docs are different.

“Bare Walls In?” or “What I Bring In?”
Some docs will make the association’s insurance policy (often called “master” policy) responsible for all building items and fixtures including those located inside your unit. Such items may include floor coverings, kitchen and bathroom fixtures, built-in cabinets and counters, appliances and equipment. In this case, you are only responsible for insuring your personal property such as furniture, electronics, and clothing. You may also be responsible for insuring alterations you make to the existing floor plan, such as laying carpet over tile.

Other docs will make the master policy responsible only for real property that is located outside of the unit. In this case, you are responsible for insuring the items mentioned above including building items and fixtures located inside your unit. Some docs will specifically list the items that you must insure yourself, but others are not as clear. This is another important reason to have us review the docs.

Rental Units
If you plan to use your condo to make a few extra bucks, proceed with caution: Once you rent or make your condo available for rental, your insurance changes. For example, once your condo is made available for rent you lose coverage for your personal property. This means items like furniture, electronics and decorations are no longer insured. Since condos often are rented furnished, this is a large gap that must be addressed before the damage happens. Coverage is also eliminated for appurtenant structures—such as a detached garage or dock—if damaged once the condo is rented or made available for rent.

This practice also eliminates the personal liability coverage under your condo insurance policy. This means if someone renting your condo injures someone else or their property and you are brought into the lawsuit your condo policy will not pay to defend you.

All hope is not lost. Most condo policies can be easily amended to close these significant coverage gaps. We can also help you evaluate how much your policy will pay you for lost rental income if your condo is damaged.

Loss Assessments
There are many reasons why your association may render an assessment against you. There are circumstances where your condo insurance policy will help pay the cost of the assessment. One circumstance is if you are assessed to pay costs for which the association is liable due to a loss that would be covered by your condo policy.

For example, say you are assessed for dollars to repair damage to common property (i.e. a pool house). The reason you were assessed is because the damage exceeded the amount of insurance available in the master policy. If the damage was caused by windstorm, the assessment coverage under your condo policy would kick in because windstorm is covered by your policy. However, if the cause of the damage was flood your policy would not pay because flood is not covered by your policy.

Your assessment coverage will also kick in to help cover the cost of the master policy’s deductible. It may also pay for liability assessments resulting from claims of bodily injury or property damage as well as liability for your decisions as an uncompensated association director or officer.

The dollar amounts of such assessments are unpredictable and depend on factors that are out of your control. This is why you should work with us to raise the amount of coverage your policy will pay for an assessment.

Properly insuring your condo is complicated. As your Trusted Choice® independent agent, we can help you secure the insurance you need to eliminate surprises if the worst happens.

Teen drivers holding a provisional license (which will be changed to be called a probationary license) and those on permits:

• may not be on the road between 11:01 p.m. and 5 a.m.
• may transport only one passenger in the vehicle besides his or her dependents. (Note: If a parent or guardian is in the vehicle, the passenger restriction is waived and the teen may transport as many passengers as there are seat belts.)
• may not use a cell phone (hand-held or hands-free), ipod or other wireless electronic device. (Note: GPS systems — portable or built-in — and ipods connected to a vehicle’s sound system are permitted, but a teen should not make any adjustments to these devices while driving.)
• must ensure that all vehicle occupants are properly restrained in child safety seats or seat belts.
• must display a decal on the front and rear license plate.
• may not plea bargain any point carrying offenses.

There will be NO grandfathering of existing permit and provisional license holders. Regardless of how much time a GDL holder has remaining on her or his permit or provisional license, he or she must abide by these requirements beginning May 1.

The decals must be displayed on a vehicle’s front and rear license plate when a permit or provisional license holder under 21 years of age is driving. The decal will be:

• affixed with a velcro system to allow for its removal when the GDL holder is not behind the wheel.
• reflectorized so that it can be seen at night.
• non-descript (it is intended for enforcement purposes).
• will be able to be purchased for $4 per pair at MVC agencies. (Note: MVC is developing a bulk purchase program for driving and high schools, police departments, and other organizations.)

Please review http://www.njteendriving.com for additional information.

As millions of Americans look for ways to stretch their budgets to survive these tough economic times, too many are not utilizing all of the discounts that may be available to them in their homeowner and auto insurance, according to a new national survey conducted for Trusted Choice.

The survey asked home and auto owners if they believed they are taking full advantage of all the discounts they qualified for on their homeowners and auto insurance policies. More than 34% of respondents, representing 53 million households, admitted they are probably not taking advantage of all homeowners insurance discounts or said that they simply didn’t know. Regarding auto coverage, more than 20% of car owners either didn’t know or said they were not maximizing all the car insurance discounts available to them.

And those who stand to benefit most from the discounts are often those who aren’t taking advantage of them: nearly 38% of respondents with a household income of less than $25,000 said they weren’t taking advantage of all possible homeowners discounts or said they didn’t know.

The survey also found that the largest percentage of respondents, about 26%, estimated they save 6-10% on their insurance premiums by using discounts. In reality, many consumers could be saving significantly more—as much as 30%.

One of the biggest advantages to using an independent insurance agent is that they can explore the various companies and find the best possible coverage for each individual family or business. Finding specific discounts can be time-consuming and confusing, so consumers should consult with their Trusted Choice independent insurance agent and ask questions.

HOME INSURANCE
Trusted Choice offers the following tips that may lead to substantial homeowners insurance savings.

• LIFE IN A GATED COMMUNITY? Some homeowners are entitled to gated community discounts.

• WHAT’S YOUR HOUSE WEARING? Some insurers give hail resistant roof discounts for Class 4 roofs and credits can be sizeable in some territories.

• “EVERYTHING OLD IS NEW AGAIN:” Some companies are coming out with new rating models that are oriented toward offering lower rates to new customers. Sometimes, a customer can even save money by applying for a new policy with the same company.

• ‘FOR BETTER OR FOR WORSE’ MAY ALSO APPLY TO YOUR CREDIT SCORE: For married couples, sometimes one person will have a better credit score than the other. Since some companies will use the score of the first person named on the application, putting the spouse with the best credit score on first can result in a lower rate.

• GOT NEW WIRES? Depending on the age of newer electrical wiring in your home, you may qualify for an age of wiring discount.

• HAS IT REALLY BEEN 10 YEARS? If you have not filed any home insurance claims in the last 10 years, ask about a discount. “Claims-free” homeowners can often save up to 20%.

AUTO INSURANCE
Trusted Choice provides the following tips and considerations that may lead to big auto insurance savings.

• IS YOUR TEEN A SCOUT? Some insurers give credits to young drivers who are involved in organizations such as Boy Scouts or Girl Scouts.

• WHAT’S YOUR ALMA MATER? At least one insurer gives a 5% credit if a driver is a graduate of a university on the company’s approved list.

• DO YOU HAVE A COMPANY CAR? Many carriers will give a multi-car discount to consumers who have a company car even if they only own one personal vehicle.

• HAVE YOU BEEN WIDOWED? Some insurers give “married” discounts to widows and widowers.

• ARE YOU SHOPPING FOR NEW WHEELS? Before you buy a car, make a short list of the ones you’re considering and ask your agent to estimate the difference in insurance premiums. The difference could save you thousands of dollars.

• ARE YOU A GREEN COMMUTER? Consider car pooling to reduce your commute frequency and ask your agent if that will impact your auto premium. In addition to reducing your carbon footprint, you may also be fattening your wallet.

• HOW YOUNG ARE YOU? In some states, if you’re 55 or older, and you’re the principal driver of your insured car, you could save on your premiums by taking an approved defensive driving class.

• GOT A TRACTOR? If you’re a full-time farmer or rancher, and you’re insuring a farm or ranch vehicle used exclusively for work on your property, a farm vehicle bonus could help keep your costs down.

MORE WELL-KNOWN DISCOUNTS:
While there are plenty of quirky discounts your Trusted Choice independent agent can investigate, there are many ‘tried and true’ discounts that many, but not all, insurance consumers know.

• UNEMPLOYED? People who are out of work should qualify for a low-mileage discount or lower rating factor that can save 5-10% on their auto premium.

• MULTIPLE POLICIES? If you have property insurance with ONE company, you may qualify for a multiple policy discount to lower both your auto and your home insurance premiums by as much as 10-15%.

• SOUND THE ALARMS! Alarm credits are often available if your home is equipped with two or more of the following: fire alarms, smoke detectors, fire extinguishers, sprinklers, deadbolt locks and a burglar alarm. Savings can be up to 15%. (Criteria vary in some states. An agent can help determine what applies in your area.)

• ACCIDENT-FREE FOR THREE YEARS? If you’ve been safe on the road and accident-free for the past three years, and you haven’t received any moving violations, you might qualify for a good record discount. To be eligible, you and all additional drivers also need to have carried continuous, standard automobile liability insurance during those same three years. If you’re a new driver and received your license within the past three years, you, too, could be eligible. Just make sure you meet the above qualifications from the date your license was issued.

• DOES YOUR CAR HAVE SAFETY FEATURES? Auto insurance discounts apply in many states, if your car comes equipped with approved anti-theft devices, anti-lock brakes, and/or passive restraint systems such as airbags.

The survey was conducted for Trusted Choice® via telephone by International Communications Research (ICR); an independent research company in Media, Pa. Interviews of a nationally representative sample of 1058 U.S. households were conducted in Oct. 28 – Nov. 1, 2009. More information about ICR can be obtained at http://www.icrsurvey.com.

• Ensure that your home’s entry is in good condition, free of loose or broken pieces on stairwells and walkways to avoid trick-or-treaters’ injuries on your property.

• Prevent fires by making sure pumpkins containing candles are placed at a distance where a child’s costume cannot be ignited. Extinguish all candles before going to bed, and use battery operated lights wherever possible.

• Be careful with costumes! All disguises should be made from flame-resistant material and shouldn’t be too long or contain sharp accessories. Try to avoid masks that may obscure vision; use hypo-allergenic makeup instead. Apply light-reflecting material to costumes as well.

• Drive sober and slowly, watching for children who may be running or wearing dark costumes in the road. When walking, travel in groups and cross only at corners—never between parked cars.

• Keep pets inside. Warn your children to stay away from animals as they visit door-to-door.

Homeowners’ Insurance
The last thing volunteers want to consider is what would happen if their favored organization file suit against them as a result of their efforts. But it happens, and not infrequently. This does happen, especially when volunteers make decisions that directly influence the finances of an organization. Often, the only insurance these volunteers have to back their efforts is a homeowner’s policy. Unfortunately, this policy may be of little assistance.

The reason homeowners’ policies do not usually cover liability stemming from actions as a volunteer is the nature of the claim. The policy is designed to cover claims of “bodily injury,” such as someone slipping on cracked pavement in your driveway; and/or “property damage,” such as accidentally setting your neighbor’s house ablaze when burning some brush on a windy day.

Claims against board members do not usually involve bodily injury or property damage. Rather, they involve bad decision making that results in financial loss to the organization, such as the decision to invest in an IT system that turns out to be a debacle, costing the organization tremendous time and money.

There is another problem. Homeowners policies do not cover “professional services.” This is important to note, because board members are often asked to serve in a capacity consistent with their profession. For example, a church member who is a CPA may be asked to serve on the church’s board as finance chairman. Even though he is not paid for his services, the “professional services” exclusion under his homeowner’s policy would still apply.

In addition to the above, homeowners policies do not cover claims of personal injury unless this coverage is specifically added. Personal injury insurance is added to the homeowner’s policy to cover claims such as libel, slander, wrongful eviction, and false advertising.

What to Do
Events causing claims are unpredictable. While the reasons shown above prove it’s unlikely, not all claims against volunteer board members are excluded by a homeowners policy. Decisions to purchase personal injury coverage and a personal umbrella policy will increase your ability to find coverage for a suit against you.

The best method for insuring the actions of board members is for the organization to purchase a directors and officers (D&O) liability policy. These policies are relatively inexpensive for most non-profits. Before volunteering, request information on the organization’s D&O policy. The absence of this insurance leaves you at risk of having no personal insurance to defend a suit brought against you by the organization and should influence your decision to serve.