|
Several years ago I was a member of a club chartered to raise money that was to be used to do good for others. One of the charities the club supported was a summer camp for youth. The club did not run the camp, however, they provided tuition assistance to youths who wanted to go to the camp.
As the camping season was about to begin, a member of the club offered to take campers to the campground. He was taking his own son and he had an extra seat in the car—his generous offer was the natural thing to do.
On the way to the campground, there was a tragic accident—the driver was distracted and went off the road (a single car accident). The driver and his son were both injured, the car was a total loss; but another camper getting a free ride was killed — a tragic result from a person trying to do good.
The auto insurance company for the driver paid out their policy limit of $10,000 and obtained a release of all liability for the driver of the auto. But that was not the end of the story.
The camper that has died had incurred significant medical expenses in the unsuccessful attempt to save his life. The injuries had been painful and the camper had suffered before dying.
An attorney representing the family of the camper made a claim against the club for damages, for the unpaid medical expenses and for the pain and suffering of the child who had been killed.
The officers of the club kept this a secret—they believed that the claim was preposterous and that nothing would come of it.
One year after the accident, as the statute of limitations was about to expire, the attorney brought suit against the club for the damages arising out of a non-owned auto liability claim. But there was no insurance. The club had neglected to purchase the readily available insurance because they did not want to spend money raised for charity work on insurance coverage. The officers of the club had good intentions, but they were uninformed and foolish.
The club treasury had grown to approximately $100,000 and the lawyer wanted all of it to settle the claim.
There was no insurance company to pay the claim; and no insurance company to defend the club from the allegations of negligence. Ultimately the claim was settled for a substantial portion of the club treasury and much of the remaining treasury went to the lawyer hired by the club to defend the claim.
This was an awful situation—a tragic accident, parents devastated by the loss of a child, and a club trying to do good financially ruined.
Having the right insurance would have protected the club.
This type of tragedy can happen to any organization, any club, any business. Talk to your insurance agent and make certain you have the protection you need. |