David J. Madara handles insurance for nonprofit organizations for OceanPoint Insurance Agency Inc. in Barrington. The agency is a subsidiary of BankNewport and OceanPoint Financial Partners.
Previously, he worked at his family’s third-generation independent insurance agency. At OceanPoint, he strives to empower his clients to identify and manage their business risk, while developing strategies and insurance protections to avert outcomes that negatively impact their mission.
This month, Madara is slated to lead a public workshop to discuss insurance and other issues affecting the nonprofit sector.
PBN: How are nonprofits adjusting to new workplace standards in response to the so-called “me too” movement against sexual harassment?
MADARA: The nonprofit sector must operate with the same high standards of conduct as the for-profit community when it comes to workplace policy, procedure and enforcement. Additionally, some nonprofits have struggled with loose processes around conflicts of interest, nepotism, hiring/firing, and role separations between staff and volunteers.
Not only are nonprofits driven by legal concerns to embrace best practices, but our society has an expectation that they exist for the “common good,” and thus a high bar when it comes to employee care. The protection provided by employment practices liability and director and officer insurance provide a backstop that must also be coupled with sound HR practices.
PBN: What changes do you see in auto insurance, particularly considering “distracted driving” from the use of cell phones, etc., and insurance issues being raised by the spreading legalization of marijuana?
MADARA: The National Safety Council recently released findings noting that 47 percent of motorists describe themselves as being comfortable texting while driving and 10 percent report driving while drunk.
Insurance industry projections for the near term see business auto insurance costs rising with a direct correlation to distracted driving-related claims. Operators of commercial fleets large and small will be compelled, if not required, to implement steps to improve their experience. The use of telematics monitoring driver behavior is one tool that many are considering and has shown to provide measurable positive results. Traditional driver training and well-enforced driver standards remain the bedrock to improving claims insurance.
The legalization of marijuana has presented a myriad of challenges to the insurance industry. How will claims be adjudicated when the injured employee was under the influence? How about the at-fault driver? Does marijuana play a role in compensable pain-management therapies? Cases are being heard across the country, but we are far from any clear precedent. Bottomline, in the workplace and on the roadway, it is going to have an impact on safety, and thus in turn insurance costs.
PBN: How are businesses protecting themselves from cyberattacks with insurance?
MADARA: Firewalls, complex passwords or attempting to avoid technology all together are not strong enough against the power of intrusion faced both at home and in the workplace. These “hard” technology-based protections are well and good, but the human element of awareness continues to be the weak link. Many of my clients who have faced breaches, fraudulently transferred funds and ransom threats have traced the incident back to unwitting human behavior.
Reasonably priced cyber liability insurance coverage is readily available and can pay for damages to your systems, costs to restore operations and notification obligations to those included in a breach. The key element to your protection is awareness training and continued reinforcement – if it smells like a fish, it’s likely a phish.
PBN: What issues do you feel are most pressing to address during this month’s workshop on nonprofits?
MADARA: Every nonprofit’s mission differs in purpose, size, budget and leadership – however the “business side” of all nonprofits face common challenges around governance, legal, finance and public relations. Our April 16 workshop gathers industry thought leaders to bring insight and practical advice for your team. Our keynote presenter, Melanie Herman, executive director of the Nonprofit Risk Management Center, is a nationally recognized consultant, author, coach and expert in helping nonprofits execute on their individual missions. Leaders in legal, communications and banking will hold a panel discussion on solutions to the challenges unique to nonprofits.
PBN: Do you find that small businesses often go without certain kinds of insurance?
MADARA: It’s not so much the kind of insurance; it’s how you spend your premium dollars. A business, including nonprofits, must first assess their greatest exposures to risk. This might be their people, their building, their reputation, their product, their customer. From there, working with a professional broker who understands these needs, insurance coverages can be crafted within a budget and focused on what matters most.
Scott Blake is a PBN staff writer. Email him at [email protected].
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