4-H Insurance & Finances

4-H Insurance & Finances

2012 4-H Youth Development Skills Café

3:30-5 p.m. Tuesday, February 28 & 10:30-12 p.m. Wednesday, February 29,STEW 214 D

4-H Insurance Guidelines

Note: Purdue University Extension Educators are not insurance professionals and have only been provided with this information in order to help local 4-H entities understand some of their risks associated with general operations, owning property, and hosting events and activities on their property or in their facilities.

A local insurance professional should be consulted for specific insurance issues. Policies which are purchased should be reviewed by someone in the purchasing entity to be certain they include desired coverage. It is recommended that each entity complete an insurance audit with your insurance professional every six months or at least annually. Your insurance professional is your ally in loss control and risk financing.

Limited Accident/Injury Insurance Policy

A.Provider: American Income Life Insurance, based out of Indianapolis, provides coverage for 4-H and Extension groups across the country - 4-H participant’s personal or family health insurance will be primary.

B.Policy options:

1.Annual Policy: $1/year for 4-H members and volunteers ($2/year for Horse & Pony members and volunteers)

Provides limited, supplemental, coverage for accidents or injuries incurred by 4-H participants during a 4-H activity/event. Illnesses are NOT covered by this policy.
Statewide blanket policy purchased annually with funds from the State 4-H Program Fee for:
Each 4-H Member
Each 4-H Volunteer (who is registered in ED)
Each Mini/Exploring/Cloverbud Member (Grades K-2) – (NOTE: educational programming for groups younger than K should NOT be reported in the ES237, but should be reported in SAM.)
Coverage includes:
Up to $2,500 for medical/surgical treatment, x-rays, hospital stay, ambulance
Up to $500 for dental services
Up to $5,000 for loss of life (within 100 days of accident)
Up to $10,000 for loss of hands, feet, sight (within 100 days of accident)
Coverage exclusions:
Illness that may occur during the event that is not the result of an accident/injury – that coverage IS provided by the Special Events policy described below
Eyeglass replacement, dentures, suicide, hernia, skiing/sledding injuries, air travel

2.Special Events Policy

3 coverage options – recommend Option C @ $.30/person/day; provides higher levels of coverage. Each event has an $8 minimum payment.
Up to $5,000 for medical/surgical treatment, x-rays, hospital stay, ambulance
Up to $1,000 for dental services
Up to $1,500 for medical and hospital expenses related to ILLNESS while policy is in force (Illness examples: heat exhaustion, appendicitis, allergic reaction…that could cause an emergency situation when youth are away from home. The $1/year plan covers localized events where youth could return home if ill.)
Up to $5,000 for loss of life (within 100 days of accident)
Up to $10,000 for loss of hands, feet, sight (within 100 days of accident)
Application available online
Can apply for up to 10 events on one application (note: multiple events on one application should be paid for from the same account)
Estimate the number of participants (you’ll pay for the exact number of participants after the event is held)
Include the number of days the coverage will be in place (matching the length of the event)
An e-mail confirmation of coverage will be provided along with a policy number
Once the event has concluded, submit a check for payment for the actual number of participants covered, along with a copy of the policy confirmation.
Policy is in place during the event, as well as to and from the event
A Special Events Policy for youth and adults should be secured by a 4-H Club or County for…
Any overnight event
Any event that is held outside of the county
Any event that involves non-4-H participants in what could be perceived as a risky activity (e.g., open shows, tack sales, enrollment nights, pool parties, etc.)
Counties/Clubs would likely NOT need a special events policy for items that would be placed in a relatively low risk category such as:
4-H Club Meetings
Rehearsals for Share-the-Fun
Team practice for Career Development Event
Areas should take out a policy for area-wide events such as CDE’s, Share-the-Fun, Camps, Jr. Leader Retreats, etc.
State Special Event policies are in place for state-wide events such as 4-H Congress, Science Workshops, Round-Up, State 4-H Jr. Leader Conference, Indiana State Fair Youth Leadership Conference, etc.
County Extension Offices may also secure Special Events policies for any/all Extension activities, including Extension Homemaker and Master Gardener functions.

C.What happens in the event of a claim?

1.Help the family realize that this is a supplemental insurance policy; their family health insurance will be primary and should be provided initially to the medical provider.

2.Complete a claim form within 48 hours of the incident (found on the AIL Web site:

Submit by fax (317-849-2793) or mail to:
Special Risk Division
P.O. Box 50158
Indianapolis, IN 46250
Questions regarding claims can be directed to: 800-849-4820
Part #1 – policy information (the number for the annual policy will be coming from the State 4-H Office);
Part #2 – patient information
Part #3 – injury report (for $1/year plan); illness report (for Special event policy plan); assistance will likely be needed from the family or a volunteer who was present when the accident occurred.
Part #4 – verification of information by supervisor of event (4-H volunteer, staff member)
Part #5 – assignment of payment to medical provider or family (may need to be completed at a later date); all receipts must be submitted before payment will be made. A family member should date and sign this section.

3.Keep a copy of this claim report, fax/mail one to AIL, and provide a copy to the family for their records.

4.ALSO…within 48 hours, complete the Purdue University Cooperative Extension Service Accident/Incident Report Form (RM 27) form should be filed with Risk Management, the CES Director’s Office, and your District Director.

D.Examples of claims that have been covered by AIL include:

A 4-H member participating in a county fair was fatally injured while riding on a tram. He fell from the tram under the wheels and was treated by emergency medical personnel at the fairgrounds. After being transported to a local hospital, he died. The American Income Life Special Risk Division paid a loss of life benefit to the family as well as the ambulance charges and emergency room fees.

A 13-year-old 4-H member was watering his calf while at the local 4-H fairgrounds when the animal knocked him against a concrete barrier. He required treatment in the emergency room for a broken wrist. AIL paid the policy maximum for medical expenses related to the injury.

A group of 4-H horse club members were practicing in the arena after a county show. One rider lost his seating and fell off. The 14-year-old was in extreme pain, so he was transported to the hospital by ambulance. X-rays found he had suffered a broken collarbone. Maximum benefits were paid under the 4-H club policy, which paid for the ambulance charge and contributed to the emergency room, hospital, and physician charges.[NOTE: had the injured individual been a non-4-H member or a 4-H parent, these expenses would NOT have been covered, unless a special events policy had been secured prior to the event.]

Information for 4-H Entities Regarding Risks and Insurance

Running an association and/or owning property and equipment creates hazards that 4-H entities should insure against. County 4-H Fair Associations and 4-H Councils (those organized with 4-H in their name or having a 4-H purpose) that are in operation and/or those that own real-estate need to provide liability protection from events that may occur due to organizational or individual actions. As of the 2010 4-H program year, Purdue University, The Trustees of Purdue University, and the Purdue Cooperative Extension Service are required to be named as an additional insured on Fair Association and 4-H Council insurance policies.

Types of Liability

General liability insurance protects your entity from bodily injury and property damage to others associated with your entity’s negligence. Some other coverages may be mixed in, but it is not a coverage for all wrongful acts for which an entity may become liable.

Auto liability coverage provides your entity with bodily injury and property damage coverage for liability associated with the use of organizationally-owned vehicles (NOT endorsing 4-H entities purchasing vans/buses, etc.). You can secure coverage for non-owned vehicles as well. This coverage generally does not apply to vehicles belonging to individuals who volunteer for, or are employed by, your organization. Individuals are always responsible for their personal vehicles.

Directors and officers coverage generally provides coverage for a broad spectrum of liability for wrongful acts to which the entity and its officers may become liable. (See III A for further D&O information.)

Property renter and building owner policies provide physical damage coverage to contents and buildings you may own. You normally can choose from policies ranging from basic minimum coverage, up to an open peril policy which offers the most protection. Coverage can be purchased at depreciated value or at replacement cost. Your agent or broker can explain the differences to you.

Workers compensation and employer liability coverage protects your entity against liability associated with employee injuries on the job. Does NOT apply to 4-H Volunteers. But does cover Extension Educators working within the scope of their duties.

Employee dishonesty coverage protects your entity from theft by employees and other dishonest acts that are generally excluded in a basic property policy.

Risks for 4-H Fair Entities

Risks Associated with Property Ownership or Use

Injuries on owned premises from third parties (slips and falls)
Property damage to 4-H entity owned property from natural hazards (fire, wind, hail, etc.) as well as human element hazards like theft and vandalism.
Other liabilities associated with hosting events on your premises (lack of supervision, premises maintenance, or crowd control)
Contractual liability

Other General Risks Associated with Day to Day County Entity Operations

Employment related risk (one of your employees sues you alleging wrongful termination)
Employee dishonesty (one of your employees embezzles money or property from you)
Personal and advertising injury (someone from your organization harms the reputation of someone else)
Contractual liability risk (a contract you or your entity enters into may require you to take on certain liabilities)
Event host liability risk (you or your entity may be found liable for the actions of others you invite to an event you host)
Negligent supervision (you neglect to provide adequate supervision)
Child molestation accusations
Actions by directors and officers (negligent actions of directors and officers)
Property damage to the property of others (you damage someone else’s property in your care and control)
Auto liability if your entity owns or uses non-owned vehicles (i.e., borrowed trucks, tractors)

The above list is by no means exhaustive; however it gives you good examples of some of the everyday exposures.

Considerations for Insurance Policies

Basic Guidelines

It is strongly advised that you sit down and review your insurance needs on at least an annual basis with an insurance professional in your community.

When considering the purchase of a policy, be certain your local insurance agent or broker is aware of all of your lease/rental agreements. You will want to be certain that any insurance requirements that may exist in those agreements are met.

When considering the addition of new events and activities during the fair or at other times during the year, check with the insurance professional via email to determine whether or not the event is covered. Doing so via email provides documentation of the reply regarding availability of coverage. Be aware that some activities and events may be excluded from coverage in your policy.

Of the insurance policies purchased by 4-H entities and reviewed by Purdue Risk Management (for purposes of establishing a baseline of information), the policies now available by K & K Insurance of Fort Wayne (available from local Farm Bureau Insurance agents) is recommended for the types of activities conducted. Caution: you should read the policy carefully and look for exclusions. We discovered a policy that included exclusions for all exhibitions as well as carnivals, circuses, and fairs. Policies with carnival, circus and fair exclusions are common. If you plan to host such events, you can usually work with your insurance professional to have the exclusions removed from the policy. An extra premium will likely be charged that is commensurate with the extra risk exposure to the insurance company.

Carnivals or other attractions including food vendors that are brought in to participate at 4-H fairs should provide their own insurance. Your 4-H fair entity should require proof of insurance from these vendors and request the following be named as additional insureds on that policy:

Your county 4-H fair entity, and
Purdue University, The Trustees of Purdue University, your county Commissioners, your county Cooperative Extension Service, and the trustees, officers, appointees, agents, employees, and volunteers of those organizations.

All policies should be primary and non-contributing by other insurance that may exist through your entity or Purdue. Proof of insurance should be in the form of a certificate of insurance and that document should clearly indicate the above requested features. These protections are of significant importance to your entity and Purdue.

Coverage Limits

The types of coverage and limits your entity purchases for any of the above exposures should factor in the type and magnitude of loss exposures you have. If you have a larger organization with significant exposure to loss, you should purchase a greater amount of coverage. Your local insurance professional can assist you with that decision. Most entities should not purchase less than $1 million in coverage for any one occurrence.

Purdue University Extension or 4-H sponsored educational events have liability coverage provided by Purdue University. Other activities that occur in the course of county fairs or year- round events/activities that are conducted as fund-raising, entertainment, income producing activities should have liability coverage in place. Outside groups or entities to which you may rent facilities for activities should be providing you with a certificate of insurance evidencing that they have coverage.

Additional Recommendations

The following points can help keep you out of court and save you money on legal fees in the long run.

Read all contracts carefully and have them reviewed by an attorney. Some attorneys will do work at a reduced fee for not-for-profit entities. This is time and money well spent on the front end. When hiring a vendor or leasing premises from others, never take on liability for risks you cannot or do not directly control. As a general and very basic risk management and loss control premise, if you don’t control it, don’t take responsibility for it. Whoever controls the risk should be responsible for it and insure it. Most insurance policies do not provide coverage for liability you assume by contract, so be very careful in this regard.

You should require vendors and other service providers coming onto your premises to provide you with proof of insurance applicable to the specific service to be provided. They should name your entity, Purdue University, and The Board of Trustees of Purdue University as additional insured. Their coverage should be primary and not contributing by any other coverage you might have. This is very important. They should provide you with a Certificate of Insurance that clearly indicates all of this. Verbal acknowledgements are not enough. If you don’t get it in writing, you can assume it does not exist. You don’t want their lack of insurance and care to become your legal nightmare.

Additional Insurance-Related Issues

Directors & Officers (D&O) Liability

D&O coverage provides protection for wrongful acts associated with the decisions and actions of the board, its directors, and officers. It is advisable that you review this potential exposure with your local insurance professional.
4-H entities, such as 4-H Councils and 4-H Fair Boards, should purchase D&O liability insurance coverage. This coverage is important for organizations that enter into agreements and or contract for services that have no direct bearing on the 4-H educational mission/purpose of the organization. Examples of such agreements include, but are not limited to, carnivals, entertainment, food vendors, buildings, rental space/facilities, etc.

Purdue University does NOT provide D&O Liability insurance to cover decisions that volunteer boards make as a group, such as entering into contracts or agreements – when outside the educational mission of 4-H.
As a specific example, let’s say that the Council entered into a contract with a carnival to provide rides at the County 4-H Fair. This contract has nothing to do with the educational mission of the 4-H program, so would be beyond the coverage provided by Purdue University to the volunteers serving in the 4-H program. A fair visitor is injured while riding one of the carnival rides and decides to sue for damages. The suit names the carnival company, the 4-H Council (since it was the organization who entered into the agreement with the carnival), and likely the individual members of the 4-H Council. D&O Liability Insurance would provide coverage of the group’s (4-H Council’s) decision to enter into this agreement.

Similar examples could include illness sustained after eating at a food vendor stand that the Council has contracted with, an entertainer who fails to fulfill a contract to perform, etc. Again, the decisions covered by D&O are the ones that are not 4-H-program related.