Directors & Officers Liability General Liability Nova Scotia Doula Association. April 15, 2016 C. Keyes, G Munroe

LEARNING OBJECTIVES Introduction to D&O * Insurance & General Liability Directors and Officers Liability General Liability Claims Highlights Key Definitions What Underwriters look at when assessing a new policy. Options for individual doulas (G. Munroe) * NOTE: D&O = Directors & Officers

INTRODUCTION: D&O LIABILITY INSURANCE What is D&O Liability Insurance? Provides protection for D&Os against liability arising from actions of board members or officers of an organization Responds to claims of alleged errors in judgment, breach of duty or other wrongful acts: ➢ As a result of actions by individual directors/officers ➢ As a result of the actions of the organization Reimburses organization for costs of indemnifying the D&Os Provides direct personal coverage if organization is unable to indemnify its D&Os

INTRODUCTION: GENERAL LIABILITY INSURANCE What is General Liability Insurance? Protects from bodily injury and property damage claims that arise from negligence that is not professional in nature. Policy covers at premises and extends to coverage for bodily injury and/or property damage arising from NSDA operations Will defend against a claim and cover legal costs

Why are these coverages important? Increasingly, D&Os, organizations and individuals in all industries are being held legally liable for their actions Liability can exist jointly and severally, i.e. as an individual or collectively Defence costs alone, even if claim is without merit, can be enormous ➢ D&O coverage protects assets of the organization ➢ D&O protects personal assets and wealth of the Directors and Officers of the corporation ➢ General Liability coverage also protects personal and NSDA assets including those of volunteers of NSDA

The duties of Directors and Officers: Imposed by Statute Imposed by Common Law By law, D&Os must act: Honestly In good faith and in the best interest of the organization With care, diligence and skill By law, Doulas must also act: Honestly In good faith and in the best interest of their clients With care, diligence and skill Duties of DIRECTORS & OFFICERS AND DOULAS

STATUTORY SOURCES OF LIABILITY Employment laws: ➢ Canadian, provincial, and territorial labour codes Human rights laws Copyright, patent, trademark infringement laws Tax laws Privacy laws Environmental laws Criminal liability

CLAIMS: COMMON LAW TORTS Violation of duty that results in harm to another party Allegations usually claim willful, wrongful, negligent or intentional acts Claimant must show that there was a duty, that the duty was breached & that damages resulted from the breach, e.g. Invasion of privacy Defamation Contract disputes to the extent that a duty would exist in the absence of a contract

DIRECTOR AND OFFICER CLAIMS: SOURCES Shareholders Employees* Government* Customers* Vendors Donors Creditors of the organization* Volunteers* Beneficiaries of services* *Many of these sources also apply to doulas

DIRECTORS AND OFFICERS CLAIMS: TYPES Conflict of Interest Acting outside authority Misappropriation of funds Mismanagement of Assets Misrepresentations/ Misstatements Employment practices Discrimination Standard setting Accreditation, credential granting / licensing Invasion of privacy Breach of duty or lack of oversight Bankruptcy

DIRECTORS AND OFFICERS CLAIMS: EXAMPLES While promoting his products or services, a company president compared them with those of his competitors. One of them, alleging he was the victim of defamation, launched a personal suit against the president. Breach of duty: Government funding was provided to a non- profit organization for organizing and hosting a specific event. An audit by the government revealed that the funds were misused and had not been used for the purposes described in the funding application. The Government sued the non-profit organization seeking damages alleging misrepresentation and breach of fiduciary duty on the part of directors of the organization

DIRECTORS AND OFFICERS: EXAMPLES OF CLAIMS Following a company’s decision to sell a subsidiary, personal lawsuits were filed against its directors by a shareholder acting on behalf of the company’s minority shareholders, who consider themselves harmed by the deal. Failure to supervise: A lawsuit was commenced against a non-profit organization and the directors for negligence for failing to supervise an employee who was misusing the funds. Failure to remit payroll deductions: Demand by Revenue Canada to pay amounts due for payroll deductions that were not remitted

GENERAL LIABILITY CLAIMS: TYPES Bodily injury & property damage Personal injury (libel, slander, defamation) Advertising injury Medical payments Tenants legal liability EXAMPLES: -Conference attendee trips on PC cord, injured -Display table collapses at community event, injuries -Organization sued for using logo without permission -Attendees hurt at fundraiser even though no negligence Bake sale products result in food poisoning Hotel damages occur during educational conference

NON-PROFIT D&O : COVERAGE CONTINUED Emotional Distress or Mental Anguish Resulting from EPL Wrongful Acts: Covered Coverage Territory: Worldwide (except EPL) Extended Reporting Period (ERP): Bi-lateral Provides 60 day Basic ERP Supplemental ERP is available for 12 months. Predefined Rating is included in the wording Retired D&O’s 12 month automatic Supplemental ERP following non-renewal or cancellation of the policy

NON-PROFIT D&O : WHAT IS COVERED? D&O policies - Insuring Agreements 1.A. Insured’s Liability Coverage 1.B. Non-Profit Outside Directorship Liability Coverage 1.C. Employment Practices Liability Coverage includes Damages and Defence costs.

NON-PROFIT D&O Newly acquired subsidiaries Newly acquired or created subsidiaries of the Organization are automatically covered if revenues are less than 35% of the Organization’s total revenues. 90 days to report to the Insurer if the revenues exceed 35% threshold Spousal Extension Extension to lawful or common law spouse of Insured Person to the extent that they are named as a co- defendant in a claim against Insured person. Defence costs Included in the limit

COVERAGE HIGHLIGHTS: KEY DEFINITIONS Definition of “Claim” Includes: Any written demands or allegations seeking non- monetary relief or damages Civil proceedings Criminal proceedings Formal administrative or regulatory proceedings Arbitration proceedings

COVERAGE HIGHLIGHTS Who is insured? Directors Officers Employees Volunteers Committee members Trustees, The Organization (or “entity”)

D&O COVERAGE HIGHLIGHTS: KEY DEFINITIONS Definition of Loss: Loss means: Compensatory Damages Includes any interest accruing before entry of judgment and; Defence costs; which an Insured becomes legally obligated to pay on account of any claim or claims made against them for a wrongful act Loss, other than defence costs. excludes: Fines, penalties, punitive or exemplary damages Any taxes owed by the Organization The salary or benefits of a claimant Re: Employment practices EPL, salaries, wages or commissions payable to a claimant Matters uninsurable by law

COVERAGE EXCLUSIONS Responsibilities, obligations, duties of D & O related to pension or retirement plans Pollution claims Bodily injury, emotional distress, mental anguish, sickness, disease, death or destruction of any tangible property (emotional distress and mental anguish related to EPL is covered) Professional Liability Abuse exclusion – normally added by separate form

What do D&O UNDERWRITERS CONSIDER TO ASSESS OPERATION? Size & type of organization Mission and purpose Services provided Length of time in business Financial Condition Knowledge and experience of D&Os Subsidiaries

UNDERWRITING INFORMATION Non-Profit D&O submission requirements D&O Application Copy of Charter or Bylaws or Letter Patent Financial Statements

D&O and General Liability : CUSTOMER BENEFITS Reasons for purchasing D&O and Liability coverage: Financial protection Peace of mind for directors and officers Adds “legitimacy” to the organization, and helps in recruiting qualified directors and officers Increasing litigious environment and the higher standard of care posed by the courts. Protection against changing legislation

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New Options for NSDA Doulas Previously: issues of availability and affordability existed Negotiated with Ontario Doula Association Secured access to National Program-ProLink Brokers Very reasonable price and easy process 1,000,000 general liability and professional coverage $67.50 for certified doulas (includes ODA membership) $47.50 for doulas in training (includes ODA membership) Other higher limit options available.

General Liability and Professional Liability for Doulas General Liability: Bodily injury and property damage protection and defense costs arising from acts not professional in nature ●You damage property or cause injury at client’s home ●Lawsuit arises after disclosure of personal client info ●Your birth cupcakes cause unintended allergic reaction Professional Liability: Investigation, defense and payment of claims arising out of rendering or failure to render professional service as a doula. ●Client slips and falls in labour after a foot massage ●Injuries result from provision of birth misinformation ●Services beyond scope of practice result in client harm

WHAT IS THE PROCESS? ●Visit ●Membership Benefits tab - Insurance FAQs ●Visit Membership tab to register and pay ●You’re DONE! It’s a personal choice, but this option is now available to help you sleep easier, and protect your practice and personal assets. Easier and much more affordable than in the past!

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