Many groups, whether incorporated or unincorporated, are likely to need, and in some cases, must have, insurance. This section deals with types of insurance cover for organisations. For the law on insurance, see Insurance.
Two forms of insurance are legally compulsory for any organisation:
- workers compensation insurance for paid employees, see Accidents at work.
- compulsory third party personal injury insurance to cover injury caused through the negligent use of a motor vehicle owned by the organisation, obtainable from the Motor Registration Division of the Department of Road Transport, see Motor vehicle accidents.
In addition to these types of insurance, organisations should consider the other types of insurance cover available.
The Local Government Association has an insurance service which can assist small clubs and community groups to obtain insurance cover.
Public liability insurance
Public liability (or public risk) insurance protects an organisation from claims from innocent people who are injured or suffer property damage caused by negligent acts of employees of the organisation. Generally, the injury or damage must occur on the premises occupied by the association or while the association was meant to be exercising a supervisory role
Public liability insurance policies may cover damage caused by volunteer workers of an organisation. Whether the negligent actions of volunteer workers are covered or not depends on individual policies. Even if an organisation's public liability insurance does not include cover for the negligence of volunteer workers, the individual volunteers will not normally be liable because of the protection afforded by the Volunteers Protection Act, 2001. See Volunteer Protection.
Public liability insurance is compulsory for community organisations in several other States. It is not compulsory in South Australia, but it is strongly recommended that an organisation that has premises or arranges excursions should have adequate public liability insurance to cover it against being sued for negligence. Advice should be sought on the amount of cover required. An organisation that intends to take part in an event (for example, a fair or fete or a promotional event) on the premises of, or arranged by, another organisation will usually be required by that organisation to have adequate public liability insurance.
Where employees or volunteers of the association might be classed as professional, then the public liability policy should be checked to see if it excludes cover for professional negligence. If the policy seems to exclude such workers, seek written confirmation from the insurance company as to whether the workers involved would be covered. If not, negotiate for the exclusion to be removed or try other insurance companies. The association may have to consider taking out professional indemnity insurance.
Volunteers personal accident insurance
This type of insurance relates to injury or damage to volunteers.
Paid workers of community organisations are covered for injury suffered by them in the course of their employment by the compulsory workers compensation insurance.
Unpaid workers and volunteers may be covered (as third parties) for injury or damage suffered by them by public liability insurance, if they could successfully sue the organisation for negligence. However, they may not be covered where the organisation was not negligent or if they knew and accepted the risk they were running through their voluntary involvement.
Volunteers Personal Accident Insurance can be obtained to provide cover similar to basic workers compensation insurance.
For information on injury or damage caused by volunteer workers, see Volunteer Protection.
Fire and other peril insurance protects a building and its contents against damage from things like fire, explosions, earthquake, aircraft, storm and tempest, flood and water leakage. An organisation that is in rented or leased premises should find out if the landlord has insured the building. Whether or not the building is insured by the landlord, the organisation is responsible for insuring its own contents.
Burglary insurance covers loss or damage by burglary following forcible and violent entry. It usually does not cover the loss of cash, or pilfering from the premises while they are open. Insurance to cover money in transit, money on the premises and specified peril insurance can be taken out, but the premiums can be high.
Besides the compulsory third party personal injury insurance which the owner of a motor vehicle must have, organisations should insure their own motor vehicles for at least third party property damage and preferably with comprehensive insurance.
If the workers of an organisation, including volunteers or unpaid workers, use their own vehicles, their insurance should be checked. If they have the legal minimum of third party bodily injury insurance only, extra insurance to cover those cars for at least third party property damage should be considered. This is because, if a worker causes damage to someone else while doing the work of the organisation, the organisation might be responsible for the damage caused. If an employer requires workers to use their own cars for work purposes, it would be advisable to get further legal advice about possible consequences and appropriate procedures.
Other types of insurance
Several less usual forms of insurance may also be required.
- Rain insurance (called pluviusinsurance) covers losses when open air fundraising events are cancelled or spoilt by rain. This type of insurance must be taken out well in advance of the event.
- Fidelity guarantee insurance covers an organisation against fraud or misappropriation by employees or voluntary workers.
- Officers' liability insurance is worth considering, particularly if the association has a significant operating budget or is involved in any high risk activity (like child care). The exact situations covered by this type of insurance vary from policy to policy, so it is important to ensure that the policy obtained best suits the association. Examples of situations that could be covered include - protecting the association against costs incurred on behalf of its officers in defending any claims against them, and insuring officers against loss arising from claims against them.
- Professional indemnity insurance may be necessary where an organisation employs or uses professional or para-professional staff or volunteers, and the public liability policy does not cover the organisation against liability for professional negligence.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.