Member to Member Liability Insurance
September 26, 2014
Groups, clubs and other organisations across the United Kingdom may be unknowingly exposing themselves to a huge gap in their insurance cover: member to member liability.
To protect against third-party property damage or personal injury for which they are liable, clubs or groups purchase public liability policies, which cover the group as a whole. But what if an individual member of your group causes harm or damage to another group member? Under a typical public liability policy, the individual members of your group are not considered third parties. Therefore, if they are responsible for personal injury or property damage to another group member, they are not protected under the group policy—unless the group policy has been extended to accommodate member to member liability.
Member to member liability insurance is usually offered as an extension rather than as a stand-alone policy. The extension must be included in your policy wording, stating that each member is insured as an individual member of the group.
When you opt for the extension, the insurer considers individual members of your group to be insured. That way, your public liability policy insures the group as a whole, and your member to member liability extension insures group members as individuals when they injure other group members or damage their property.
Be careful not to confuse member to member liability with employers’ liability. If your group has employees, you are legally required to purchase employers’ liability insurance, which covers employers’ liability for bodily injury or disease that employees may suffer in the course of their employment. Member to member liability, on the other hand, covers the liability between members.
Who Needs It?
Anyone who manages a group’s interests should consider a member to member extension to the group’s public liability policy. All groups, such as sports clubs, youth groups and not-for-profit organisations, can benefit from member to member liability insurance.
It does not matter whether the group is run by a multinational company or a group of local volunteers—whatever the legal status, the group should still obtain the necessary protection of a member to member liability extension.
Plug Your Cover Gaps
Neglecting to secure member to member liability insurance could be a grave mistake and lead to lengthy legal battles between group members that threaten to undermine your entire organisation.