Insurance Responds to Increasing Not-for-Profit Exposures
WARREN, NJ, June 6, 2005 - In an environment of growing governance and regulatory concerns, the Chubb Group of Insurance Companies has introduced a
portfolio package of five key insurance coverages for not-for-profit organizations. ForeFront PortfolioSM for Not-for-Profit Organizations includes insurance coverage for directors and officers and entity liability, employment
practices liability, fiduciary liability, kidnap/ransom and extortion, and crime.
"With a heightened focus on corporate governance and regulatory scrutiny in all areas of business, directors and officers
at not-for-profit organizations are growing more concerned about the spillover effects of these two issues," said Michael
Schraer, vice president, Chubb & Son, and not-for-profit product manager, Chubb Specialty Insurance. "As a result, not-for-profit
organizations are recognizing the need for broad protection -- like that found in Chubb's new product."
Chubb's ForeFront Portfolio for Not-for-Profit Organizations offers customers a choice among five insurance coverage sections.
Customers may also purchase individual limits for each coverage section or a single combined limit for their executive liability
insurance coverages. Customers purchasing the employment practices liability (EPL) insurance coverage section can also access,
at no cost, Chubb's Employment Practices Liability Loss Prevention Program, which offers customers the opportunity to receive
a premium reimbursement for approved loss prevention expenses. The loss prevention program also provides access to:
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a toll-free hot line, connected to a leading law firm specializing in employment practices liability litigation, to assist
customers with handling employment issues when they arise;
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a Web site that features best practices for establishing an EPL loss prevention program; and
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a network of more than 120 law firms, human resources consulting firms and others who can help address specific employment
issues.
"Not-for-profit organizations are especially susceptible to the financial devastation that may accompany litigation and the
cost to defend such suits," said Schraer. "In addition, attracting experienced and talented directors, officers, employees
and volunteers can be difficult-especially if their personal assets are on the line when they go to work for a not-for-profit
organization. Our new ForeFront Portfolio for Not-for-Profit Organizations is designed to specifically meet the insurance
needs of this market by providing affordable and broad insurance protection for the organization and the people who make it
run."
Some highlights of the coverage sections that comprise ForeFront Portfolio for Not-for-Profit Organizations include:
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100% of defense costs within the policy limit are paid for covered claims, and defense costs are advanced.
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Chubb's duty to defend claims and customer access to a panel of expert attorneys.
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Coverage for defense expenses outside the limits of the policy for qualifying customers.
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Personal injury and publisher's liability insurance coverage for allegations such as libel, slander and invasion of privacy.
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Limited excise tax coverage for situations where the IRS levies unexpected tax liability (for example, on an executive director's
compensation that the IRS deems to be excessive).
Although many not-for-profit organizations recognize their exposure to employment practices liability and directors and officers
liability claims, they often overlook their fiduciary liability exposure. "Just like for-profit businesses, not-for-profit
organizations offer employee benefits as a way to attract and reward good employees. That means the not-for-profit organization,
its fiduciaries and its benefit plans can also be sued by plan participants, as well as the Department of Labor and the Pension
Benefit Guarantee Corporation," Schraer said.
"Not-for-profit organizations can be targeted as an 'easy mark' by white collar criminals and extortionists," said Schraer.
"Some 80% of workplace crime is carried out by employees and the consequences can be costly especially for a not-for-profit
where every dollar counts. The average organization loses 6% of its total annual revenue to fraud and abuse committed by
its own employees.
"Cause-related not-for-profit organizations and their employees can be targets for extortion threats by radical groups and
criminals," said Schraer. "This type of unexpected threat can quickly paralyze operations and push the organization to its
financial limits. Through ForeFront Portfolio, Chubb offers the not-for-profit market a broad product and years of experience
to help protect organizations against these types of risks."
For additional information on ForeFront Portfolio for Not-for-Profit Organizations, visit http://www.chubb.com/businesses/csi/chubb3738.html.
The member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property
and casualty insurance for personal and commercial customers worldwide through 8,000 independent agents and brokers. Chubb's
global network includes branches and affiliates in North America, Europe, Latin America, Asia and Australia.
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