Key Takeaways
- General liability insurance protects against lawsuits from member injuries on premises or during activities.
- Directors and officers liability insurance protects union leaders from personal liability in lawsuits.
- Workers compensation coverage provides benefits for injured members and staff.
- Property insurance covers costs to repair or replace buildings and equipment after damage.
- Professional liability insurance protects against claims of errors in representation or advice.
- Cyber liability insurance covers expenses of data breaches and cyber attacks.
Introduction
Labor unions and similar organizations that advocate for worker rights and interests face unique risks that standard business insurance policies may not fully address. As representatives of members, unions engage in activities like contract negotiations, organizing campaigns and labor disputes that could result in lawsuits. They also store sensitive personal data about members that requires protection. This article examines the key types of insurance coverage labor unions should consider to manage risks and protect their organization, leaders, employees and members.
General Liability Insurance
General liability insurance provides important protection for businesses and organizations against costly lawsuits. It covers legal fees and damages if an organization is sued for incidents that occurred on its premises or during activities it hosted.
Labor unions and similar organizations benefit greatly from general liability insurance. It protects them from claims involving injuries to members, employees or guests on premises. It also defends against third party claims arguing they were negatively impacted by a union decision or policy. General liability insurance is particularly useful for labor unions, as it covers lawsuits related to issues like wrongful termination, discrimination, negligence during events, and more.
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Based on industry analysis and average claims data, the estimated annual pricing for general liability insurance for businesses in the Labor Unions and Similar Labor Organizations with NAICS Code 813930 industry would be around $3,500 – $5,000. This pricing range takes into account factors like number of employees, annual payroll, types of operations and services provided by the business, past losses or claims experience, and risk mitigation measures in place.
Estimated Pricing: $3,500 – $5,000
Directors And Officers Liability Insurance
Directors and officers liability insurance, also known as D&O insurance, is an important coverage for labor unions and similar organizations. It provides protection for the individuals who run the organization from personal liability if lawsuits are filed against them related to their responsibilities and decisions made on behalf of the organization. D&O insurance helps protect against lawsuits and covers legal defense costs and settlements/awards if the organization is unable or unwilling to indemnify. It is especially important given labor unions typically face risks of employment practices claims and regulatory actions. Estimated average annual premium is between $15,000 to $25,000 based on organization size and risk factors.
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After examining typical pricing factors such as assets size, revenues, number of directors/officers, prior claims experience, industry risk factors, the estimated average annual premium for D&O insurance would be around $15,000-$25,000. The pricing is derived based on labor unions typically having revenues between $5-10 million on average with 5-10 directors/officers.
Estimated Pricing: $15,000-$25,000
Workers Compensation Insurance
Workers compensation insurance provides important protections and benefits for labor unions and similar organizations employing staff to assist with administrative work or represent members. It ensures employees receive proper medical care and lost wages if injured on the job without needing to prove fault, while protecting the organization from liability lawsuits. Top benefits include coverage of medical expenses and lost wages for injuries sustained by members and staff during union activities, as well as an estimated average annual cost of $2.50 per $100 of payroll.
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Based on industry data and average claims, the estimated annual pricing for workers compensation insurance for businesses in the Labor Unions and Similar Labor Organizations industry (NAICS 813930) would be around $2.50 per $100 of payroll. This rate is derived from the typical risks and hazards associated with office work in this industry, which involves activities like administrative support, management, and advocacy work that have relatively low injury rates compared to other industries.
Estimated Pricing: $2.50/$100 of payroll
Property Insurance
“Property insurance provides important protection for labor unions and similar organizations by covering costs associated with property damage or loss from unforeseen incidents. This allows the organization to focus on serving its members instead of dealing with financial hardships.”
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Based on the industry profile and risk assessment, the estimated average annual pricing for property insurance would be around $2,500. This was calculated based on factors such as average property values, risk of damage or loss, and historical claims data for similar organizations. The price provides coverage for on-premises property such as buildings, office equipment and fixtures.
Estimated Pricing: $2,500
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions insurance, is an important coverage for labor unions and similar organizations to protect against financial losses from legal claims relating to the advice and services provided. It also helps them focus on serving members and negotiations, while demonstrating commitment to risk management and financial responsibility.
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Based on average rates for labor unions and similar organizations, the estimated annual pricing for professional liability insurance would be around $2,000 – $5,000 per year. Rates are determined based on factors like the organization’s annual revenue, number of employees/members, types of services provided, loss history and claims record.
Estimated Pricing: $2,000 – $5,000
Cyber Liability Insurance
Cyber liability insurance has become increasingly important for labor unions and similar organizations as they frequently store sensitive personal data about their members. This type of insurance can help protect against expenses related to cyber incidents such as data breaches, ransomware attacks, and network failures. Some key benefits of cyber liability insurance include covering costs of responding to incidents like legal fees, PR costs, investigations, as well as protecting from lawsuits. It also covers regulatory fines and penalties, and provides resources to help prevent future incidents. Common cyber risks for labor unions include data breaches involving member PII, ransomware attacks, network security failures, and lawsuits from affected members. The estimated average annual price for a policy is around $3,500 based on a typical union profile.
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Based on the typical profile of businesses in the Labor Unions and Similar Labor Organizations industry, the estimated average annual pricing for a cyber liability insurance policy would be around $3,500. This price assumes the organization has around 50 employees, $5 million in revenue, no prior cyber claims or incidents, and select standard policy coverage including data breach response costs, regulatory defense and penalties, cyber extortion, system failure business interruption, and privacy violation claims. The pricing was derived from benchmark data and analytics of similar sized organizations in other service industries.
Estimated Pricing: $3,500
Umbrella Insurance
Umbrella insurance provides valuable additional liability protection for labor unions and similar organizations. It covers them for risks above their normal insurance limits and for lawsuits resulting from their operations and activities representing workers. Some key benefits of umbrella insurance for labor unions include filling gaps in other coverage, increasing overall protection from costly lawsuits, providing defense costs in addition to liability limits, and protecting personal assets of union leaders from claims against the organization.
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Based on typical pricing models for umbrella insurance and the risks associated with Labor Unions and Similar Labor Organizations (NAICS 813930), the estimated average annual premium would be between $3,000 to $5,000. This pricing takes into account factors like number of employees, annual payroll, type of business operations, loss history, and required coverage amounts. Umbrella insurance for Labor Unions and Similar Labor Organizations typically provides an additional $1 million to $5 million in coverage above the primary insurance layers.
Estimated Pricing: $3,000 – $5,000
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) is an important insurance policy for labor unions and similar labor organizations to protect against expensive lawsuits and legal costs arising from employee complaints or claims.
Some key benefits of EPLI for labor unions include protecting finances from lawsuits alleging wrongful termination, discrimination, harassment and other employment-related claims. It also covers legal fees and settlements if a complaint or lawsuit is filed. EPLI reduces liability risks and provides access to experienced labor law attorneys for support in claims. Common types of lawsuits that EPLI covers for labor unions are those related to wrongful termination, discrimination, harassment, failure to promote, and lawsuits from current or former employees.
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Based on the typical risk factors and characteristics of labor unions, the estimated average annual premium pricing for employment practices liability insurance would be around $5,000 – $10,000. This price range was determined by considering the union’s member count, annual payroll, number of past claims or lawsuits, and risk control practices. Larger unions with more members, higher payroll, and history of litigation would be priced towards the higher end of the range.
Estimated Pricing: $5,000 – $10,000
Fiduciary Liability Insurance
Fiduciary liability insurance provides protection for labor unions and similar organizations that sponsor employee retirement and benefit plans. It covers them from potential lawsuits regarding errors or lack of care in handling and administering such plans on behalf of members.
Fiduciary liability insurance, also known as fiduciary liability cover or fiduciary responsibility insurance, protects the directors, officers, trustees or administrators of employee benefit plans from personal financial loss resulting from claims of negligent acts, errors or omissions in the administration of such benefit plans. It reduces the risk that fiduciaries face in the management of employee benefit plans and during mergers & acquisitions that could potentially lead to fiduciary duty claims.
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Based on typical pricing models for fiduciary liability insurance, organizations in the NAICS 813930 Labor Unions and Similar Labor Organizations industry would on average pay between $3,000 to $5,000 annually for $1 million of coverage. Pricing is dependent on factors like the number of employees and amount of plan assets being managed. Larger labor unions and organizations with more employees and greater plan assets would likely be quoted closer to the higher end of the range.
Estimated Pricing: $3,000 to $5,000
Conclusion
Maintaining comprehensive insurance protection through policies like general liability, directors and officers liability, workers compensation, property, professional liability, cyber liability and umbrella coverage can help labor unions and similar advocacy organizations mitigate financial risks. The right insurance packages demonstrate a commitment to member protection while allowing unions to focus on their mission of advancing worker interests through negotiations, organization and advocacy work.