YMCA Management Webinar Series: Understanding Insurance Policy Fundamentals

The declarations pages are typically the first section of any policy and contain high-level information such as:

• Insurance carrier
• Policy type
• Effective dates
• Coverage limits and premiums
• Named insured
• Broker information
• Forms and endorsements included in the policy

This section often includes a forms list identifying standard coverage forms, endorsements, exclusions and special conditions specific to the association.

The insuring agreement is the heart of the policy. It outlines what the insurance company agrees to cover, subject to all other terms, exclusions and conditions.

Each coverage line contains its own insuring agreement. While wording varies, these agreements generally describe:

• What types of losses are covered
• Under what circumstances coverage applies
• Who is entitled to protection

Insuring agreements must always be read in conjunction with exclusions and conditions.

The named insured provision identifies who is covered under the policy. For YMCAs, this is a critical section.

Most policies include:

• The association
• Employees
• Affiliates

Volunteer coverage is especially important for YMCAs and often requires confirmation or endorsement if not explicitly included. Gaps in named insured language can create unintended exposure.

Exclusions carve out specific risks that are not covered under a policy. Some exclusions apply broadly across many policies, while others are coverage specific.

Common exclusions include:

• Nuclear and war risk
• Intentional or criminal acts
• Certain contractual liabilities
• Pollution, subject to defined exceptions

Some exclusions exist not because coverage is unavailable, but because it belongs under a different policy. For example, employment practices claims are excluded from general liability and workers’ compensation to direct coverage to employment practices liability insurance.

Conditions define the responsibilities of both the insured and the insurer. They establish the rules that must be followed for coverage to apply.

Common condition topics include:

• Premium payment
• Timely notice of claims or occurrences
• Cooperation with defense
• Separation of insureds
• Subrogation rights
• Coverage territory

Conditions may also restore limited coverage where exclusions apply, making them an important but often overlooked section.

Automobile policies cover bodily injury, property damage and certain pollution events arising from the ownership, maintenance or use of a covered auto.

Key considerations include:

• How vehicles are scheduled or defined
• Coverage for owned, hired and non-owned vehicles
• Volunteer driver coverage
• Exclusions for workers’ compensation, care custody and control, intentional acts, wear and tear, and diminution in value

Understanding how autos are classified and scheduled is essential to avoid coverage gaps.

Directors and officers (D&O) insurance protects leadership and the organization from claims alleging mismanagement, breach of fiduciary duty and governance failures.

Coverage is typically structured as:
Side A: Individual directors and officers
Side B: Reimbursement to the organization
Side C: Entity coverage

Employment practices liability addresses wrongful termination, discrimination, harassment, retaliation and hostile work environment claims, including third-party allegations.

D&O and EPL policies are claims made forms, with defense costs eroding limits. Abuse and molestation exclusions within D&O policies should be reviewed carefully to avoid unintended gaps.

General liability policies typically cover:

• Third-party bodily injury
• Third-party property damage
• Personal and advertising injury
• Medical payments

Property damage under general liability refers to damage caused to third-party property, not damage to YMCA-owned buildings.

Common exclusions include abuse and molestation, pollution, liquor liability, watercraft, breach of contract, criminal acts, traumatic brain injury and athletic participant exclusions. Professional liability and abuse coverage are often embedded within the general liability policy but operate with separate terms, definitions and limits.

Property insurance covers direct physical loss or damage to buildings, contents and business income at scheduled locations resulting from covered causes of loss.

Key considerations include:

• Proper scheduling of locations
• Valuation methods such as replacement cost, agreed value, and actual cash value
• Catastrophic peril exclusions and endorsements
• Ordinance and law coverage
• Co-insurance requirements
• Vacancy provisions

Property policies require direct physical damage to trigger coverage, which explains why losses such as pandemic-related shutdowns were not covered.

Umbrella and excess policies sit over general liability, automobile liability and employers’ liability. They do not apply to property or directors and officers coverage.

Key concepts include:

• Drop-down provisions
• Aggregate exhaustion
• Notice requirements
• Separation of insureds
• Subrogation and coverage territory

Umbrella policies often mirror underlying exclusions and conditions, with limited areas of broader coverage.

Workers’ compensation policies cover employee injuries and occupational disease as required by state law, generally without limit.

Key components include:

• Statutory workers’ compensation benefits
• Employers’ liability coverage for tort claims
• Exclusions for intentional injury, penalties, volunteers and knowing violations of law

Special attention is required for exposures involving camps, lakes or maritime activity, which may trigger federal statutes such as USL&H or Jones Act coverage.