While abuse claims and allegations are few in number for a social service agency, the cost in public reputation can be devastating. When you couple that with the cost to defend, plus any potential payment for a judgment, the client can be driven out of business by a single claim.
Abuse claims can occur between an employee and consumer, or between consumer and consumer. Likewise, abuse claims may occur between a consumer and third party. The form of abuse can be sexual, physical or mental in nature. Make sure the form you offer to your client responds to all these types of occurrences. Also, make sure your carrier will defend and indemnify on behalf of the entity should the need arise – not all carriers do.
Many times defense of the claim can exceed the cost of the award. To protect your client, be sure the cost to defend is in addition to (or outside) the liability limit. Therefore, make sure abuse and molestation carry its own limit and aggregate.
Loss prevention plays a critical role in preventing and defending abuse claims. Policies including background checks and control of “one on one” exposure to vulnerable clients should be in place and rigorously enforced.
Finally and most importantly, have the confidence that your carrier has the expertise to adjust the claim. Ask these questions; does the carrier have special handling of these types of claims, are they familiar with the coverage form and the defenses a social service agency can provide? This is when experience matters.
Abuse accusations, real and unfounded, all need proper coverage and defense. This coverage is an essential component to all social service, nonprofit and healthcare proposals.