Insurance
PTA Insurance
Local PTA units are responsible for obtaining their own insurance for the protection of the officers and assets of their association. The consequences for an uninsured PTA group can be devastating. Although these incidences are infrequent, they have happened. Insurance coverage can help with many difficult scenario’s that occur unexpectedly. Even though not required by Iowa PTA as a Standard of Affiliation at this time, PTA’s may want to consider fidelity bonds and liability insurance.
Why do we need insurance?
In most states PTA’s are not covered by schools because they are independent from the school. There are some districts that cover local PTA units under their policy in our state, but it’s best to assume that they do not unless they have provided you with the information about that policy. Provide your principal with a list of your events & activities and request a written letter from the school or school district that states your events and activities are covered. Quite often the school administration assumes you are covered without actually having the proof. It’s never safe to assume that in case of an accident, the school district will cover costs for liability.
Do we really have to worry about lawsuits?
Unfortunately, even PTA units face third party liability suits or are victims of embezzlement. Missing funds can be near impossible to replace and hiring a lawyer is expensive. As an officer, it is your responsibility to make sure your members follow best practices to prevent potential problems. By purchasing insurance, your group is covered in the event that something bad does happen.
- Three-legged races, bouncy houses – potential bodily injury
- Off-site events (i.e. skating parties, etc.) – potential bodily injury
- Popcorn machines – fire and burn hazards
- Bake sales, volunteer served meals – food borne illnesses or allergic reactions
- Classroom rewards or prizes – possible choking hazards
Fidelity Bonds
A fidelity bond covers losses sustained by a PTA through fraud or dishonesty committed by an employee, elected officer, or any person authorized by an officer to handle PTA funds. A fidelity bond is in the best interest of the PTA and should be secured from a reliable insurance company, in an amount to be determined by your board. The cost of this insurance should be covered by the PTA. Be sure to understand all the policies required to be covered in the event of fraud or embezzlement.
Liability Insurance: Iowa PTA suggests that at a minimum, PTA units hold liability insurance.
The following are three types of liability insurance:
Commercial general liability insurance provides coverage for a PTA’s legal liability arising from bodily injury, personal injury (false arrest, libel, slander, and other defined injuries), advertising injury, and property damage. This insurance coverage may be purchased either on a continuous, year-round, comprehensive coverage basis, or on a one-time basis for special events. School district liability insurance does not automatically extend to PTAs or their activities.
Auto liability insurance should be secured before transporting students in private vehicles. PTA and/or school district policies may cover the liability of parent drivers while on field trips or other school activities.
Directors and Officers (D&O) liability insurance provides protection for claims arising out of the wrongful acts of board of directors and officers in making policy and managing the affairs of the PTA that do not fall under the definition of physical injury. D&O liability insurance may provide coverage for the defense costs resulting from covered claims. Examples of D&O liability claims include:
- Discrimination based on age, sex, race, national origin, disability, etc.
- Improper employment termination
- Breach of contract (e.g., contract disputes with vendors, suppliers or service providers)
- Mismanagement of association funds
The following insurance firms are recommended by National PTA:
AIM Association Insurance Management, Inc.
