Why PTA Insurance?
PTA fundraising activities can expose third parties to potential injury during PTA-sponsored events. In addition, any time parents, teachers or children attend a meeting or function, the location or actual site where the meeting or function is being held (such as the school) may waive liability for injured parties while on their property. Further, if school property is damaged during an event, the school may hold the PTA liable for repairs. This coverage is called Premises Liability and is included in the Liability Plus Portion of the PTA insurance program. Coverage within the General Liability policy, which the PTA may find valuable, is the coverage for libel and slander. Should a PTA official render an opinion concerning an individual either publicly during a meeting, or in private, which improperly defames that person's character and a defamation claim is brought against the PTA, then the libel and slander coverage would apply.
Now that you have safely raised funds on behalf of your PTA, you have a responsibility to protect those funds. This should be done through the purchase of fidelity bond insurance. Several members of your board may be involved in the handling of this money. Whether it is cash, checks or other securities, these funds could be stolen or improperly deposited into a personal account. Typically, this situation occurs when a trusted member of the PTA simply "borrows" the money for "just a little while" until they get their personal finances squared away and then "will just pay it right back". Unfortunately, the money is seldom seen again. A fidelity bond is also called Employee Dishonesty Coverage. It provides the insurance needed to protect the monies PTA members have worked so hard to earn from dishonest volunteers.
Directors and Officers.
Individual directors and officers serving as PTA board members and those acting under their direction are prime candidates for “directors and officers” (D&O) coverage. Some of the basic coverage includes Legal Actions & Allegations of Mismanagement, Misappropriation of Funds, Misrepresentation, Dissemination of False or Misleading Information and Wrongful Acts. These professional liability exposures are covered when a notice of claim is filed or received. D&O coverage provides the extra piece of protection to insure the safe management and smooth direction of your PTA.
A PTA will sometimes have a tendency to believe they are covered by school district liability insurance. This is seldom so. If a PTA is covered by school district insurance, they should obtain a “Certificate of Insurance” as documentation for PTA files.
When using vendors at activities that provide rides and similar activities, ALWAYS HAVE THE VENDOR GIVE THE PTA ITS “CERTIFICATE OF INSURANCE” VERIFYING INSURANCE COVERAGE. This “Certificate of Insurance” covers the vendor—IT DOES NOT COVER THE PTA.
Having insurance does not mean that every activity the unit undertakes will be covered. There may be exclusions within the PTA’s insurance policy that prohibits or restricts certain types of activities (swimming, for example). Also, some activities may require a greater level of liability than is available to your PTA. DO NOT ASSUME YOUR UNIT IS COVERED FOR ALL ACTIVITIES. Contact your insurance carrier and obtain an “Insurance Program Summary and Loss Control Guide.” Remember, a lawsuit against a local unit could impact the state PTA and therefore every local unit in Virginia.
THE TIME TO ASK QUESTIONS IS BEFORE THE EVENT OR ACTIVITY IS PLANNED!
BE SURE TO READ SECTION 3 FOR A DESCRIPTION OF THE DUTIES OF THE TREASURER.