In today’s economic environment, social service agencies are being asked to do more with less. Simply put, there is not enough money to expand programming while covering administration and other related operating costs. Under growing pressure from funders and the public, agencies are forced to make tough budget choices around expanding program delivery and managing expenses that don’t directly support their mission.
One item often overlooked is social/human service professional liability coverage. In lieu of purchasing a comprehensive insurance policy, organizations are instead directing all funds into their service offerings. Yet, without proper coverage these organizations jeopardize their ability to continue to operate in the wake of a liability claim, leaving the needs of some of the most vulnerable at-risk.
Take a claim of alleged assault/battery or sexual abuse, for instance. Even if the claim is found to be false, the cost of a legal defense can financially cripple an organization. The claim can also result in significant reputational damage and place the organization at risk of losing funding or the support of donors. Without professional liability coverage a social service organization may not have the means to mitigate both the financial damage and reputational harm, causing it to shut its doors for good.
Due to high unemployment and underemployment, social service organizations have a crucial role in providing care and support to vulnerable populations. According to the National Law Center on Homelessness and Poverty, approximately 1,750,000 individuals in the United States are currently homeless, 36 percent of which are families with children. Nationally, an estimated 12 million children live below the poverty line and over 30 million Americans live in or on the edge of hunger.
To alleviate the risk of closure during a time of great need, insurance professionals must work with social service agencies to help them fully understand their liability exposures and the consequences of having gaps in coverage. Additionally, any child welfare, group home, shelter or other social service organization should consider purchasing specialized social/human service professional liability coverage.