LIABILITY BASICS CHECKLIST*
for Nonprofit or Other Organizations in Connecticut

Lisa Nachmias Davis, Esq.
Davis O'Sullivan & Priest LLC
129 Church Street, Suite 503
New Haven, CT 06510

203-776-4400
Fax 203-774-1060
davis@sharinglaw.net
www.sharinglaw.net

This list is a very simplified summary of some basic considerations for nonprofit organizations in Connecticut worried about liability.  THIS IS NOT LEGAL ADVICE, BUT A CAUTIONARY "HEADS UP!"  You may also read a longer article HERE.

Applicable Laws - Check with a Lawyer!

  1. Claims relating to employment laws (see employer basics checklist) 
  2. Tax reporting, filing, withholding, payment obligations no protection! JUST GOOD PRACTICE
  3. Contract liability (if you don't pay -- if you don't deliver on what you promised)
  4. Tort liability for negligence (if someone gets hurt because someone did not observe the appropriate standard of care)
  5. Tort liability - intentional
  6. Hazardous activity (you're responsible for what happens no matter whose fault)
  7. Violating charitable restrictions, breaching fiduciary duties

Who Needs Protection?

  • The officers and directors
  • The corporation itself - preserving assets
  • Volunteers who get hurt
  • Volunteers who hurt others
  • Employees
  • The public -- people who may get hurt

Methods of Dealing with Liabilities

  •  Statutory
  • Corporate

    • Corporate form (protects against #3; against #4-6 unless directly involved)
    • Liability limitation provision in certificate authorized by CGS 33-1026(b)(4) (protects only against #7)
    • Corporate indemnification / advancement provisions (in statute; in bylaws; protects against derivative liability claimed against agents of the corporation by virtue of status)  (See my liabilities article!)

  • Insurance  - REMEMBER TO INCLUDE COST OF INSURANCE IN GRANT APPLICATIONS

    • General liability or "GCL" (general commercial liability) - careful of exclusions!
    • Workers' compensation
    • Directors' and Officers' Liability ("D&O")- careful of exclusions!
    • BONDS (someone handling money)
    • D's and O's can have their own umbrella policies that include service on boards
    • Make sure all those who may create liability have appropriate coverage (auto, etc)
    • Make sure GCL / D&O policies cover injuries TO volunteers BY volunteers or you
    • Event insurance
    • Being "additional insured" on someone else's policy
    • Other people's insurance (Errors & Omissions coverage of your accountant, etc.)
  • Contractual

    • Releases and waivers signed by members of the public, etc. who may be harmed
    • Hold Harmless clause in contract with another "deep pocket"
    • Risk Management techniques:  background checks, best practices, etc.

 

*DISCLAIMER:
THIS INFORMATION IS NOT PROVIDED AS  LEGAL ADVICE AND CREATES NO ATTORNEY-CLIENT RELATIONSHIP.
PLEASE CONSULT YOUR OWN LEGAL AND FINANCIAL ADVISORS.