A recent claim settlement has prompted difficult questions at a non-profit organization that operates residential and day programs for adults with developmental disabilities across 4 sites in southern Alberta. The claim arose from an incident at one of the newer group homes, acquired 14 months earlier as part of an expansion that added 2 residential locations and a vocational training program to the organization's original footprint. The insurer paid out on the claim, but the settlement process revealed that certain aspects of the organization's current operations had never been communicated to the broker or reflected in the coverage purchased. The executive director, reviewing the correspondence from the insurer, realized that the organization's insurance program had been designed for what the non-profit looked like 5 years ago, not what it had become.
The organization's growth had been significant. Annual operating revenue had increased from $1.8 million to $4.2 million over 4 years. Staff headcount had grown from 22 to 58. The vehicle fleet had expanded from 3 vans to 9. The vocational program, which placed participants in community work placements, introduced contractual relationships with 12 local businesses, each requiring certificates of insurance and each creating liability exposures the original program never contemplated. A commercial kitchen had been added to one site to support a social enterprise baking operation, bringing food safety risks and specialized equipment into the picture. Through all of this growth, the insurance program had been renewed annually with only minor adjustments, primarily premium increases tied to inflation and claims history rather than substantive coverage reviews.
The broker relationship had followed a predictable pattern: renewal documents would arrive 6 weeks before expiry, the executive director would sign where indicated, and the new policy would take effect. Conversations about coverage structure, limits adequacy, or emerging exposures were rare. The organization carried a general liability policy, a directors and officers policy, commercial auto coverage, and property insurance for its owned and leased premises, but no one had systematically mapped these policies against the organization's actual risk profile in several years. The recent claim had been paid, but margin notes in the adjuster's file suggested that different facts might have produced a different outcome. The board of directors, now aware of the situation, has asked for a comprehensive review of how the organization approaches insurance as a risk transfer tool and whether the current program actually matches the exposures the non-profit faces today.