Insurance for Family and Youth Services Organizations: What Your Program Actually Needs

Family and youth services organizations are some of the most diverse within the nonprofit sector; under that heading you could encounter after-school programs, mentoring organizations, family counseling agencies, youth development centers, shelters for runaway and homeless young people, crisis intervention services, summer camps, gang intervention programs, and groups that serve families involved in the child welfare system.

Their aim is the same, which is to strengthen families and improve the circumstances for young people; moreover, they also have, although this is less obvious, a complicated and frequently underestimated insurance risk.

The wide range of services offered by organizations that provide programming for families and young people—such as physical activities, counseling, transportation, residential care, and community events—means that a typical commercial insurance policy probably has some gaps. In this article we look at the main types of coverage that your organization should have and the areas where such gaps most often occur.

Why Family and Youth Organizations Have Unique Insurance Exposure

Several factors cause the risk profile of family and youth services organizations to be different from that of other nonprofit organizations.

Since you are dealing with minors, there are certain insurance issues that arise when working with children and young people, especially in relation to coverage for abuse and molestation, the safety of participants during physical activities, and the duty of care that your organization has while the participants are in your programs.

The range of your activities is wide. For example, one organization could run a tutoring session on a Monday morning, hold a basketball league on a Monday afternoon, have a family counseling session on a Tuesday, and organize a community fundraiser on a Saturday. Since each kind of activity has its own liability issues, the insurance coverage must match the type of activity taking place, not just the premises.

You are allowed to transport the participants. A great many family and youth services organizations offer transportation to and from programs, field trips, community outings, and appointments. If the transportation is carried out using organization-owned vans, staff vehicles, or volunteer cars, then there will be corresponding auto liability exposure which has to be given specific attention.

Your staff and volunteers are in positions which involve a high level of contact. The youth workers, counselors, coaches, mentors and residential staff all work directly with the young people and their families. This close contact not only brings about a degree of professional liability but, most important of all, opens the possibility of abuse and molestation claims which are not covered by ordinary general liability policies.

The Coverages That Matter Most

General Liability Insurance — Including Athletic Participation

General liability forms the basis of any insurance scheme for a family or youth services organization since it provides coverage for claims involving bodily injury and damage to property made by third parties. However, there is one point that is particular to this field and is frequently ignored.

Most ordinary general liability policies have an exclusion relating to participation in sports, which means that injuries suffered during organized sports, physical fitness activities, or recreation programs are not insured. For youth organizations which operate sports leagues, fitness programs, adventure activities, or even informal recreational activities, this exclusion can be a major issue.

At Lamb we make it a specific point of ensuring that coverage for athletic participation is included rather than excluded in the programs that we design for our clients in the field of family and youth services. It is worthwhile verifying whether this exclusion is in place if your present policy was not obtained through a broker who is familiar with this area.

Abuse and Molestation Coverage

For any organization that deals with minors, this type of coverage is not optional; it is the most important protection that your program requires and one of the most frequently omitted things.

Standard general liability policies exclude all claims relating to abuse and molestation. This exclusion holds true no matter how thorough your screening procedures are, how effective your staff training is, or how carefully your programs have been designed. If an incident takes place and your policy does not specifically provide coverage for abuse and molestation, your organization will be financially liable without the support of insurance.

In family and youth services organizations—those in which staff, volunteers and mentors work closely with young people in a variety of settings—it is necessary that this aspect be clearly stated in your program, since it is the case in all the programs that Lamb prepares for clients in this field.

Professional Liability Insurance

Family and youth services organizations often give counseling, case management, crisis intervention, family support services and other professional services as part of their main activities. A claim made by a client or a member of a family that your organization had given harmful advice, had not taken the appropriate action to intervene, or had made a professional error which resulted in damage would come within the scope of professional liability coverage and not general liability.

This type of coverage is available on its own, and youth-serving organizations usually do not have it when their program has been based on a standard commercial template. Whenever your organization offers any kind of direct counseling, case coordination, or family support services, professional liability should be included in your program.

Participant Accident and Health

If a young person is hurt while taking part in one of your programs—such as a sports event, a field trip, a recreational activity, or a residential program—the participant accident and health insurance will provide coverage for their medical bills. This is different from general liability, which applies to claims for which your organization is legally responsible.

Participant accident insurance is tailored to the relationship between participant and organization and comes into effect irrespective of who is at fault.

For youth organizations that have active programs, participant accident and health coverage should be seen as supplementing general liability rather than replacing it.

Directors and Officers (D&O) Liability Insurance

Under a comprehensive management liability scheme, directors’ and officers’ insurance safeguards the personal finances of your board members and top executives against claims resulting from their management decisions. For family and youth services organizations which administer government contracts, have large budgets, and maintain complicated employment relationships, there is a real presence of D&O risk, and the process of recruiting a board depends on whether or not this type of coverage is available.

Employment Practices Liability Insurance (EPLI)

Youth-serving organizations usually have a combination of full-time staff, part-time program workers and seasonal employees — a kind of staffing arrangement which leads to exposure to employment practices. Complaints regarding wrongful dismissal, discrimination, harassment or scheduling disagreements may arise from any of these employment relationships. Coverage for your organization is provided in such cases.

Fiduciary Liability

Fiduciary liability insurance safeguards the people who are in charge of your organization’s retirement benefits or other benefit schemes against claims of mismanagement. Since it forms part of a full management liability program, the insurance should be included if your organization has any responsibilities regarding benefit plans.

Hired and Non-Owned Auto

Most family and youth services organizations incorporate transportation into the way they operate, since staff who drive young people to activities, volunteers who pick up families for events, and counselors who travel between different service sites all result in auto liability risks that go beyond the coverage provided by a typical commercial auto policy.

Coverage for hired and non-owned vehicles extends to your organization in the case where employees or volunteers use their personal vehicles for purposes connected with the organization. This type of coverage is one that is often missing from various programs and is one of the first aspects that we examine when looking at a family or youth services organization’s insurance program.

Special Events Coverage

Throughout the year family and youth services organizations hold fundraising galas, community events, graduation celebrations and donor receptions. It is not certain whether your standard general liability policy covers events held off site or at rented venues, since the terms of coverage differ greatly from one insurer and policy to another.

For special events, dedicated protection is provided, covering the venue, the vendors, and the attendees, so that a fundraiser or a community event does not result in an uninsured exposure.

For more information on special event insurance check out our other blog, Holiday Event Insurance for Nonprofits: How to Manage Seasonal Liability 

Cyber Liability Insurance

Family and youth services organizations keep sensitive records about the children, young people and families they work with. The data involved—such as case notes, family assessments, references to courts, records relating to mental health and financial information—is protected health and personal information and carries important obligations in terms of notifying of a breach and complying with regulations if it is compromised.

Cyber liability insurance includes the expenses involved in dealing with a breach or a ransomware attack such as those for a forensic investigation, legal advice, the obligation to notify clients, and for business interruption. It forms a distinct type of coverage from general liability and is becoming more and more essential for any organization which serves young people and manages electronic records.

Umbrella Liability

The coverage provided by an umbrella policy increases the limits of the basic insurance policies. In the case of organizations which offer family and youth services, since a single incident concerning a minor might result in a large claim, this type of coverage forms a important element of a full insurance program. You should regularly review the umbrella limits as your organization grows and as your activities expand.

Foreign Travel Liability

Foreign travel liability should be looked into if your organization runs international exchange programs, mission trips, or sends its staff or young people abroad for any kind of programming. Ordinary domestic policies do not cover international situations and this kind of exposure is easily neglected until it’s actually needed.

The Coverage Gaps Most Family and Youth Organizations Do Not Know They Have

Based on our experience working with family and youth services organizations nationwide, the gaps we see most frequently are:

• The exclusion relating to athletic participation was never taken out of the general liability policy.
• The report fails to include coverage of abuse and molestation, either omitting it altogether or providing limitations that are too low to have any real significance.
• There is no accident or health insurance coverage for participants in the program when they are injured as a result of the activities. Yet professional liability is not provided even though the organization offers counseling or case management services.
• The car that had been hired and that was not owned was not available, even though the staff regularly used their own vehicles for work on the program.

Whenever a claim comes about, any of these gaps can turn into a major financial issue. Taken together, they show the gap between a program designed for your sector and one that wasn’t.

Protecting the Organizations That Protect Families

The family and youth services organizations have a great deal of responsibility; the young people and families that you work with rely on you, and therefore your insurance scheme should be designed to support this objective rather than create any gaps which might put it in danger.

Lamb Insurance Services is the biggest insurance broker in the country that specializes solely in providing insurance for nonprofit and human service organizations. Having more than 20 years’ experience in working with family and youth services organizations of all sizes and of all kinds of programs, we have access to the leading insurance companies that specialize in this area. While putting together an insurance program for a family or youth services organization, we are fully aware of which types of coverage are important and which standard exclusions should be watched for.

Talk to a Lamb client executive today to learn more about insurance for family and youth services organizations.