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Liability Risk Management and Protection For Non-Profits
Liability Risk Management and Protection For Non-Profits
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If you remember nothing else, remember this. An organization can never get too
comfortable in its operations, regardless of the protections put in place. It helps to
have waivers, contracts, and policies (oh my) in place. But with case-law constantly
evolving, and new laws constantly being enacted, what worked yesterday may not
necessarily work today. For that reason any documents or procedures put in place
should be living and breathing, adapting as the necessity arises. Moreover, audits
should be done on a regular basis to ensure that these documents and procedures
are still effective.
And speaking of effective, the best way to ensure effectiveness is to start at point A
and understand exactly what the potential exposures are. After all, putting some
generic policy in place won’t help if it is not catered precisely to what it is your
organization does and situations your organization finds itself in.
For example, what type of liability could your organization potentially be on the hook
for? There are generally different levels of liability that non-profits can face including;
(i) vicarious liability - a doctrine that imposes liability upon one person for the actions,
or failure to act, of another; (ii) direct liability – where an organization is liable for its
own actions; and (iii) strict liability- a doctrine that imposes liability regardless of
whether there is an intent to be negligent. So ask yourself, what activities do your
Is There No Hope?
When looking at all of this together, the possibility that a non-profit organization, and
its members, could be held liable in a civil or criminal action is quite large. Seeing this,
many people began to avoid working for/serving on organizations to avoid ending up
in court. Consequently, many states began to adopt some form of immunity directed
at non-profits where states provide certain levels of immunity to particular classes of
volunteers and others such as directors or officers. It's important to look, if you
haven’t already, at the statutes for your state when determining your organizations
level of immunity. Also look into good samaritan laws as well.
Don’t be deceived though. These immunity laws generally protect volunteers. Non-
profits are somewhat protected, but on the rarest of occasions. In most instances,
non-profits can still be held responsible for any injuries that occur or laws that are
broken. Consequently, with the applicability of immunity being so small, there is still a
need for non-profits to develop a solid plan to aid in minimizing risks. As a head-start,
here are four tips to keep in mind:
At the end of the day, every non-profit organization needs to have a plan in place to
limit liability and protect themselves from potential lawsuits. Not only does this help to
protect the organization, those the organization seeks to serve and those who have