Local PTA units in Minnesota are responsible for obtaining their own insurance for the protection of the officers and assets of their association. The consequences for an uninsured PTA group can be devastating. And though these incidences are infrequent, they have happened, and your insurance coverage will help through any difficult scenario’s that occur unexpectedly. Your state PTA and bylaws will have information about what types of insurance your PTA is required to carry. Even if not required, PTA’s may want to consider fidelity bonds and liability insurance.
Why do we need insurance?
In most states PTA’s are not covered by schools because they are independent from the school. There are some districts whom might still cover the your group under their policy, but it’s best to assume that they do not unless they have provided you with the information about that policy. Provide your principal with a list of your events & activities and request a written letter from the school or school district that states your events and activities are covered. Quite often the school administration assumes you are covered without actually having the proof. And it’s never safe to assume that in case of an accident, the school district will cover costs for liability.
Do we really have to worry about lawsuits?
Unfortunately, even PTA’s face third party liability suits or are victims of embezzlement. Missing funds can be near impossible to replace and hiring a lawyer is expensive. As an officer, it is your responsibility to make sure your PTA members follow best practices to prevent potential problems. By purchasing Insurance, your group is covered in the event that something bad does happen. It’s a fail-safe for the continued strength of your PTA and it’s officers.
What are some potential hazards where insurance would be helpful?
- Three-legged races, bouncy houses – potential bodily injury
- Popcorn machines – fire and burn hazards
- Bake sales, volunteer served meals – food borne illnesses or allergic reactions
- Classroom rewards or prizes – possible choking hazards.
A fidelity bond covers losses sustained by a PTA through fraud or dishonesty committed by an employee, elected officer, or any person authorized by an officer to handle PTA funds. A fidelity bond is in the best interest of the PTA and should be secured from a reliable insurance company, in an amount to be determined by your board. The cost of this insurance should be covered by the PTA.
Your PTA should consider liability insurance when there are projects or activities that may result in potential hazard for PTA members, students or other third parties.
The following are three types of liability insurance:
Commercial general liability insurance provides coverage for a PTA’s legal liability arising from bodily injury, personal injury (false arrest, libel, slander, and other defined injuries), advertising injury, and property damage. This insurance coverage may be purchased either on a continuous, year-round, comprehensive coverage basis, or on a one-time basis for special events. Generally speaking, school district liability insurance does not extend to PTAs or their activities.
Auto liability insurance should be secured before transporting students in private vehicles. PTA and/or school district policies may cover the liability of parent drivers while on field trips or other school activities.
Directors and Officers (D&O) liability insurance provides protection for claims arising out of the wrongful acts of board of directors and officers in making policy and managing the affairs of the PTA that do not fall under the definition of physical injury. D&O liability insurance may provide coverage for the defense costs resulting from covered claims. Examples of D&O liability claims include:
Discrimination based on age, sex, race, national origin, disability, etc.
Improper employment termination
Breach of contract (e.g., contract disputes with vendors, suppliers or service providers)
Mismanagement of association funds