If your clients are involved with youth, the elderly, or disabled individuals, than it is in their best interest to secure abusive acts coverage. Most associations have Commercial General Liability (CGL) and Directors & Officers (D&O) insurance. However, it is common for these insurance policies to exclude claims related to abuse. An abusive acts coverage policy is arguably one of the most crucial types of protection for an organization as abuse claims can be very costly to defend, even if the allegation of abuse is unfounded.
Abuse and Prevention
Your clients should be up on UDAAP compliance. UDAAP refers to unfair, deceptive, or abusive acts or practices from individuals offering financial products or services to consumers. For starters, it is important for your clients to fully understand the risks associated with abuse. So, what are unfair practices? The typical definition for abuse used by insurance companies and the courts is, “any act or threat involving molestation, harassment, corporal punishment or any other form of physical, sexual, or mental abuse.” Vulnerable persons include those but are not limited to “children under the age of consent, persons who are living with mental or physical disabilities, and the elderly.”
The pursuit of providing exceptional services to vulnerable people can be quite an effective tool for preventing abuse. By having systems in place, businesses help protect those they serve, and if abuse does occur, then they are better equipped to help its victims. It is also smart for them to protect their reputation and ensure financial sustainability in the event of a claim.
It is strongly recommended for businesses to have an abuse prevention program and a robust training program that coincides with it, along with many other preventative policies and procedures. It is also smart to have thorough guidelines in place for handling reported or alleged abuse, requiring all suspected inappropriate behavior and/or alleged incidents to be reported and followed up on. Even with all these safety measures in place, abusive act claims will still arise and the offenders will all too often be accused and hit with a very expensive lawsuit.
Protection Where it Counts
Clients need coverage that will respond to the unique risk profile of their operations to protect against allegations of abusive acts. For this, it would not be advantageous for clients to be restricted by the limits of a General Liability policy. An individual policy with separate limits that is occurrence-based is where the insured can benefit the most and be safeguarded against allegations of abuse, including but not limited to physical injury, sickness, disease, mental anguish, mental injury, shock, fright or death.
Components of a strong Abusive Acts Coverage:
- Individual Policy – separate limits
- No shared aggregate
- Occurrence Form
- Duty to Defend
- Protects insured against third party claims alleging abusive acts
- Coverage is NOT limited to alleged or actual sexual misconduct
- Supplemental payments for investigation and counseling related to allegations of an abusive act
- Supplemental payments for expenses in retaining the services of a media consultant or public relations professional in response to allegations of an abusive act
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.