- General Liability
- Sexual Misconduct and Molestation
- Financial and Professional Liability
- Process for Reimbursement
- Reimbursement Calculations
Each year ACE National negotiates a contract providing four types of insurance coverage for ACE and its affiliates that are in good standing, meaning in compliance with ACE policies and requirements. This insurance protects ACE and its affiliates – including volunteers, staff, consulting firms, and contributors – against different liability claims. Volunteers are defined to include mentors, guest speakers, and national and affiliate board members. To be covered, board members must: i) be listed in the ACE database and marked either “active” or “pending;” OR ii) be identified on a current list of board members posted on affiliates’ pages on the ACE website.
The following describes ACE’s insurance coverage and explains the process and formula whereby affiliates reimburse ACE National for their share of insurance costs. Also described is the process for affiliates to request certificates of insurance from organizations and vendors providing services to affiliates and their students (e.g., bus company).
Because insurance policies are complicated legal contracts, this chapter only summarizes and paraphrases ACE’s insurance policies. The language in the actual policies, and not the following descriptions, is the only true representation of the terms of coverage. More details about ACE’s insurance coverage can be found in an Statement of Insurance Summary provided by our carrier.
The following summary describes ACE’s four insurance policies covering ACE National and its affiliates:
1. General Liability
This policy covers claims made or suits brought against ACE for bodily injury or property damage to third parties, resulting from negligence by ACE and/or its affiliates, including volunteers and staff. Coverage is triggered upon notice to the carrier of an occurrence or a civil legal proceeding alleging damages. An “occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful conditions, that may result in bodily injury or property damage and a claim being made against ACE.
2. Umbrella Liability
This policy covers catastrophic losses and is generally written over various primary liability policies including general liability. An umbrella policy provides excess limits when underlying liability policies have exhausted their limits.
3. Sexual Misconduct and Molestation Liability
This insurance covers ACE and its affiliates from claims of any actual or alleged abuse, molestation, mistreatment or maltreatment of a sexual nature, including, but not limited to, any sexual involvement, sexual conduct or sexual contact, regardless of consent. In general, this coverage extends to any volunteer and staff, past or present. The insurance policy gives a more precise definition of individuals who are covered.
4. Financial and Professional Liability (FINPRO)
FINPRO coverage consists of three parts:
Directors and Officers Liability Covers ACE’s and its affiliates’ boards of directors and officers from claims causing financial loss due to errors or omissions made by board members or officers. Independent contractors are excluded from coverage.
Employment Practices Liability Covers ACE, its affiliates, and “insured persons” for any claims alleging discrimination, harassment, wrongful termination or other instances of employment discrimination brought by past, present or prospective “insured persons.” In general, “insured persons” includes volunteers and staff.
Crime Liability Covers matters such as theft, forgery, funds transfer fraud, credit card fraud and fraudulent money orders. Crime coverage protects ACE and its affiliates for their property being stolen by an employee or third party, depending on the type of theft. In general, an “employee” includes volunteers and staff. Independent contractors are not considered “employees” under the crime coverage.
Affiliates and mentors should note ACE does not carry auto insurance for them. For this reason, mentors must not drive students to or from any ACE activity, or for any other reason.
Only affiliate volunteers and staff listed as “active” or “pending” in the database are covered under ACE’s insurance. (Board members identified on an affiliate’s current board list posted on its page on the ACE website are also covered.) There are two exceptions. First, affiliate staff are not covered under ACE’s workman’s compensation policy. Second, the Employment Practices Liability policy covers past, present and prospective volunteers and staff. (See above for more details.).
II. PREMIUM REIMBURSEMENTS BY AFFILIATES
Affiliates are required to pay their proportional share of ACE’s overall insurance costs. The process and calculations for reimbursement are explained below.
1. Process of Reimbursement
Insurance premiums are based on the number of students, volunteers and staff in the ACE database at the end of the program year (June), or named on affiliates’ current Board lists. Therefore, it is crucial that affiliates keep the database and board lists up to date.
ACE’s insurance policy period covers 12 months in the future. Because it is not possible to determine the future number of students and volunteers, the insurance company fixes the premium according to the count during the preceding 12 months. However, all properly registered future students, volunteers and staff, regardless of the total number, are covered under the new policy period.
Each year the insurance carrier conducts a policy audit and adjusts the premium, up or down, to reflect any difference between the number of students and volunteers estimated at the beginning of the policy and the actual number at the end of the policy. Any premium adjustments are carried over to the affiliates, increasing or decreasing their next insurance coverage invoice.
At the end of May, affiliates will receive a reminder to clean up their database records and correctly indicate whether students, volunteers, and staff are active or inactive. Records with a “pending” status should be switched to active or inactive. “Pending” students or volunteers remaining in the database, as well as active participants, are included in the count sent to the insurance company.
ACE initially pays the insurance premiums in full on behalf of ACE National and affiliates. Then, in October after the policy renewals and the binding of policies, ACE will calculate each affiliate’s share of the total cost and send out invoices. (An insurance binder serves as a temporary or interim policy until a formal policy is issued.)
2. Reimbursement Calculations
The General and Umbrella Liability policy premiums are determined by the total student count. Affiliates are invoiced based on their total active and pending students.
The Sexual Misconduct and Molestation policy premium is determined by an affiliate’s total number of volunteers and any staff.
The Financial and Professional Liability policy premium is calculated according to the financial limit of the policy (as determined by the combined total of affiliates’ assets) and the total number of active affiliates. Affiliates are invoiced on a flat average fee per affiliate because there is no way to allocate the expense proportionately. Each year affiliates are required to submit to ACE National a current balance sheet showing the value of their assets.
III. CERTIFICATES OF INSURANCE
A certificate of insurance (COI) serves as evidence of insurance coverage. While it is usually used as evidence of liability insurance, it may also be used as proof of other types of insurance.
A certificate is not part of a policy. It does not add, remove or alter any provisions of the insurance contract. It is simply a summary of a company’s insurance coverages.
Sometimes, an affiliate may be asked to provide a certificate of ACE’s insurance – for example, a construction company or developer of a job site which ACE students will tour may request a COI from ACE. In such an instance, affiliates should contact their Regional Director.
Other times, affiliates may seek a COI from an organization or vendor providing services to the affiliate – for example, a bus company chauffeuring students to and from an activity, or a venue where an ACE event is being held (e.g., awards banquet, a trades construction day). A COI Request Form and the procedure for requesting a COI can be read here.