I am wondering if any of you have a building owned buy your team, or associated non-profit that you use for multi-team or shared maker space uses may include
If so, what approaches do you take for insuring such places? Thanks for any knowledge and experience!
Are you referring to insuring the real property of the space, the physical property contained therein (ex tools and stuff), or liability insurance for your club and its agents? What is the legal structure of your club? Own or rent? Do you have a mortgage requiring a specific kind of insurance?
Our club is organized as a 501c(3) nonprofit corporation containing 5 FIRST teams, and we generally open our space to visiting teams and sometiems host events and camps. As of last year when I was the student board member, we had a single contract with a insurance group specializing in nonprofits that came with a rate card every year where you would pick pre-made coverage amounts in each category. These are rough estimates but I think we had something like $2.5M in bodily injury liability, some lesser amount in property damage liability, maybe $10k in inland marine (covers personal property owned by the club), and I think some coverage in case a director of the club was found personally liable (normally something called the corporate veil protects directors from being sued for what the corporation does, but this can be broken in certain cases).
Always read policies in full before signing and have all exclusions fully explained to you. Be aware of notification provisions that may require you to alert the insurance carrier of a possible claim as soon as it occurs, even before legal action is taken. The insurance company has a right to defend claims so never sign any settlements or pay money to someone who is injured or accept fault without talking to them and ideally an independent attorney.
We rent one property and use space made available by corporate sponsors, so we do not have and real property that we own and need to insure. If your club owns the building outright, that will obviously be something you want and it would very a lot by the type of building (masonry, brick, etc), if there are sprinklers (this is a huge factor in cost of policy), is there a fire alarm with automatic dialer, etc. Flood insurance would be separate and you need to check the government flood maps to see if you are on a floodplain.
Also there can be some traps regarding fire code and occupancy classification which could come up not only in inspections but also in the event an insurance claim is necessary. The authority having jurisdiction in our area got our sponsor-hosted space closed down last year because they classified our use as Education - E (we believed this was wrong as it only applies to true schools, after school education, etc, not clubs that happened to have student members under the Internaional Fire Code, but it didn’t matter what we thought lol). This would have required walls built to separate it from the industrial facility classified as Factory Medium Hazard - F2 However, if you are teaching summer camps, especially with little kids, or if your meetings are drawing big crowds or have fixed seating like a theater or something, it’s possible that Assembly - A or another category could apply. You will also want to make sure that all fire code issues are corrected before possible site visits by the insurance company. This is important because some types such as Assembly have fixed max # of people present while others do not, and because some require sprinklers and fire alarms while others don’t.
Example violations that we have had include: not maintaining 6’ clearance around electrical panels, extension cord used as permanent wiring, extension cord ran through holes in the drop ceiling, overloaded outlets, tape on electrical breakers, and the two we actually got written up for were not having fire extinguishers up to date (your local fire extinguisher store can tell you how many are needed based on size and usage and when to service them) and defective exit signs/floodlights (hit that test button every week). In our city, there is no fee if fixed by the first re-inspection, other cities that is very much not so. While on the topic of the fire code, you should find out how often your regular inspections will be and when the next one. Remember that a complaint inspection can occur at any time.
With the advent of COVID, of course we have not had people coming to visit and also we have instituted waivers of liability for all members. The virus was our motive in implementing them but of course they can also play a role in liability mitigation for injuries, etc. The issue is that when minors are involved, as they always are in FIRST, it is not as simple as getting the parent to sign. In many states, contracts purporting to waive the minor’s right to a legal claim for injury signed by a parent have been found to be unenforceable. You should consult with an experienced lawyer before developing waivers as poorly written or overly broad ones may be unenforceable. Never have the mindset that because you have a waiver, you do not need to be on the lookout for potential sources of liability.
Was the waiver of liability something requested by the insurance company, or something you undertook on your own initiative? Was the intent to reduce the scope of insurable losses?
In some cases, it might be more ethical to ask for an acknowledgement of risks rather than a waiver of liability. The former might be sufficient to strike a balance between dissuading farfetched lawsuits while still allowing justified claims to be paid. (Basically, a settlement is more likely to be socially optimal by balancing the interests of all parties, but waivers tend to create the impression of a black-and-white issue, which can often only be rebutted through expensive and risky litigation.)
@aidanh010 thanks for the response! I was referring to liability coverage. We are just getting things set up, but we will have a nonprofit that will be using/renting a building from a sponsor. Your information was very helpful. We are trying to get an understanding of costs. I know, like you, there is lots of good information to tap into here, and since we are expanding into new areas, any information we can get is great.
It was more that some members of the board felt the need to “do something” in response to re-opening as opposed to any external mandate. If I remember correctly, we started with a list of rules and some acknowledgement of risks types stuff, and then added in a couple lines provided by a lawyer about waiving liability.
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