BY TOM MCDONOUGH AND PAULETTE NORMAN

In today's increasingly litigious business climate, the ability to eliminate as many potential claims as possible against an association could be the difference between financial success and failure.

Many nonprofit organizations are now looking to Association Management Companies (AMCs) as a potential solution to their liability risk woes. Because the association's employees are considered AMC personnel, the nonprofit organization is able to avoid many employment-related claims – the largest legal liability area for a nonprofit organization and its board of directors.

That's why it's important for AMCs and associations to consider a wide range of factors when choosing professional liability insurance coverage. Every association is vulnerable to mismanagement suits – particularly as they relate to discrimination, harassment, wrongful employee discharge, overtime compensation and violation of family and medical leave rules. A staggering percentage of all claims made against associations and their leaders are employment-related. ("Reducing Liabilities" Volume 1, Issue 1)

A variety of insurance plans are available that can help protect associations and AMCs from liability suits that arise from director or employee errors, personal injury, event cancellation and more. Here are a few policies that benefit the association industry. (more)