Read More »" /> 101 Ways to Improve your Cooperative | National Cooperative Law Center - Part 11

101 Ways To Improve Your Cooperative

CHAPTER TEN: PROTECTING YOUR COOPERATIVE

        In this section, Boards discover tasks to take in order to properly protect the corporation from catastrophic events that could destroy the community and put an end to the Cooperative.

74. Be sure that your corporate charter remains intact. The state issues a charter when the Cooperative was formed and each year a small fee and a report must be filed with the state. If you fail to do so, the corporate shield against personal liability is lost as well as rights to the name.

75. Insist on an annual “insurance audit.” Require all the insurance policies to be reviewed by an expert underwriter or risk manager to ensure that the Cooperative and the Board have adequate coverage’s by insurers that have a proven track record of paying claims, and possess solid financial means for future claims. Examine your deductibles and policy limits. Consider the claims that are covered, and those which are not. Get a written analysis from the expert and also schedule a session with him to explain and answer questions. The expert used should not be the agent or broker that sold you the policies. You want an independent opinion.

76. Mold appears to be a type of claim that is not presently covered by insurance. Develop strategies to ensure that you will not get a claim of this nature. The Cooperative Attorney plays a vital role when mold is suspected.

77. Make sure your policy covers employment claims, including sexual harassment. Likewise check for civil rights claims.

78. It will not do much good to have insurance policies if you cannot find them when you need them. This goes back to our earlier point about record retention.

79. Likewise, it does no good to have insurance policies if you neglect to make a claim to the insurance company when you are sued. That is why the Cooperative Attorney should be involved in litigation as soon as possible.

80. Another area that needs to be covered by insurance is that of employee fraud and embezzlement. We see more and more of these cases and the impact on budgets can be devastating.

81. On an annual basis, check the insurances of the Management Agent as required by the Management Agent contract. Make sure that there is coverage for their employees’ fraud and embezzlement. Be sure that the insurance company is licensed to do business in the state, that it has an adequate AM Best rating, and that the insurance company will notify you at least ten days prior to cancellation of the policy.

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