independent licensed child care programs ramp up community ...

Ontario’s Childcare Industry
ADCO Membership Programs
By: Deborah Gibson, B.A., CIP.
I
t may come as a surprise
to many to learn that privately
owned child care
programs and their owners face exposures
to litigation that are similar
to those faced by Directors and
Officers serving on a “Non-profit”
Board. Setting up an incorporated
entity does not shield the organization
or owners from being named
in a lawsuit for “wrongful acts”,
errors and omissions, or wrongful
employment related actions. While
organizational structures can differ
significantly, regulations imposed
by various Ministry-governed Acts
and Bills mean both non-profit and
commercial child care operations
must play by the same rules and be
held accountable.
The sources of Directors and
Officers liability suits against commercial
child care operators can
come from customers (parents),
DIRECTORS & OFFICERS LIABILITY
INSURANCE IS NOT JUST FOR THE
NON-PROFIT ORGANIZATION
suppliers, competitors, creditors,
government and, thanks to Bill
168, even the most trusted employees.
The key to understanding how
insurance products respond is to
know the definitions of loss defined
as a “wrongful act” and that this
is distinct and excluded from most
standard General Liability wordings.
Your centre’s package policy
that provides Commercial General
Liability responds to two primary
areas, namely bodily injury and
property damage for which your
centre can be found negligent.
A Directors and Officers Liability
policy will typically revolve
around the insuring agreement
that refers to “All loss which the
Director or Officer shall become legally
obligated to pay as a Claim
first made against them during the
Policy Period for a Wrongful Act”
and for which the Corporation is
unable to indemnify them by law
or by reason of its financial impairment.
The definition of Director or
Officer is that of a duly elected or
appointed director of the Corporation,
along with further definitions
of insured persons (includes
employees and spouses as co-defendants,
subsidiaries or affiliates).
A wrongful act can mean an employment
related wrongful act like
harassment, discrimination, libel,
slander, humiliation, defamation
or invasion of privacy. It can also
mean “failure to provide or enforce
adequate or consistent corporate
policies and procedures designed to
prevent, halt or punish the conduct
highlighted in these types of wrongful
acts”. The other important coverage
issue is “defense costs” and
how insurance can respond to pay
high legal costs to prove your case.
Outside Directors’ Wrongful Acts
are also included.
It has become increasingly important
to keep up with current laws
and regulations that set standards
of practice for both childcare and
school safety and operations. If your
policies and procedures are not compliant
with current standards, even
the best policy will not protect you.
There are exclusions to review. We at
CCV Insurance are proud to support
ADCO members in helping them
understand these important areas.
We also encourage you to contact
ADCO for upcoming events, workshops
and resources to provide more
detailed information and access to
“Better Insurance”. Both non-profit
and commercial operators deserve
to BE SURE when it comes to all matters
of liability insurance!
This literature is descriptive only. The
precise coverage afforded is subject
to the terms, conditions and exclusions
of the policy issued. More information
on Bill 168 is available at
www.ontla.on.ca
“It has become increasingly important to keep up with current laws and
regulations that set standards of practice for both childcare and school
safety and operations. If your policies and procedures are not compliant with
current standards, even the best policy will not protect you."
SUMMER/BACK TO SCHOOL 2011 • ChildcareTODAY 21