Property, Auto, Bonds, Worker’s Compensation coverage

If your organization owns buildings or other real property, it will probably want to have property insurance coverage (fire, windstorm, etc.). If it owns moveable equipment such as an aquatic plant harvester or boat, it can cover its investment in those items by purchasing inland marine coverage. Both property and inland marine coverage are designed to pay for damage to the property itself, not for damage or injury that might be done to others.

The organization should have auto insurance coverage (liability and physical damage coverage) if it owns any vehicles, and may want to have non-owned and hired vehicle coverage even if it does not own a car or truck. This coverage will help to provide protection for the organization if someone uses his or her own vehicle while conducting business on behalf of the district or association.

Some organizations do not have a building or much equipment, but they do have a desk and a file cabinet somewhere with records and papers. A form of property insurance can be obtained to help replace the office equipment, and it may be wise to consider buying valuable papers coverage to help with the cost of reconstructing papers and records, should they be destroyed.

Even if the organization does not have employees, it should consider the protection of a worker’s compensation policy. If, for example, a lake association hires a contractor who does not properly follow the worker’s compensation laws, the responsibility for injuries to the contractor’s employees could lie with the association. Always obtain proof of insurance and Workman’s Comp from any contractor prior to hiring them.

	For more information about Insurance for Lake Organizations, download People of the Lakes (see Chapter 7) (PDF 5.71 MB)
	Liability risks and protections for Wisconsin Lake Groups (1995) (PDF 78 KB)

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General Liability, Errors and Omissions coverage

General liability insurance is an important form of coverage. It is significant not only for payment of tort liability judgments against the organization, its officials and employees, and the costs of defense, but also for the expertise and resources of the insurer in managing and helping to defend lawsuits.

Although no policy covers every form of liability, some insurance policies are more broadly written than others. While broader policies may cost more in initial premiums, they may cost less in the long run because of fewer uninsured claims. Good quality insurance coverage may have its costs, but the expense of not having proper coverage needs to be weighed against those costs.

Accidental injuries can create significant exposure to litigation for lake organizations.  A claim can be brought for injuries accidentally sustained while involved in any of a wide variety of lake management activities. Lake organizations may be using aeration, placing buoys, owning dams, using cars and boats, or sponsoring water sport activities. These sorts of activities have the potential for accidents and liability if the lake organization is involved in them.

A lake organization should also consider the possibility of litigation when entering into contracts with third parties. A typical contract might be for aquatic plant harvesting, a dredging project, or catering a picnic. A properly drafted contract will define responsibility and liability exposure

At a minimum, liability coverage should be written so that all board members, officials and employees are insured under the policy. It may be desirable to insure volunteers in some circumstances.

The liability insurance program can include what is commonly known as Public Officials Errors and Omissions (E & O) coverage for the board and employees. E & O coverage helps to protect and defend the individual board members and others against suits alleging negligence-caused financial or other nonphysical injury. Many E & O suits claim officials or employees have made mistakes in carrying out their official duties or that they are operating the organization in an improper way. E & O coverage can be written as a separate policy or provided as part of the General Liability policy.

	For more information about Insurance for Lake Organizations, download People of the Lakes (see Chapter 7) (PDF 5.71 MB)
	Liability risks and protections for Wisconsin Lake Groups (1995) (PDF 78 KB)

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