FAQ: Insurances for Public Libraries

Property Insurance

Property insurance provides protection against most risks to property, such as fire, theft, and some weather damage. This may include specialized types of insurances such as fire, flood, earthquake, or boiler.
Considerations for property insurance policies:

• Level of insurance: Replacement cost, actual cash value, function replacement cost?
• Value of items currently in the building: Books, computers, furniture, fixtures?
• Collection values, including replacement costs, purchase price, or processing fees?
• Value of historical, rare, or valuable materials in the collection or on display?
• Coverage for other people’s property, like employees, patrons, display items?
• Possible types of specific coverage that may cover certain situations:
  • Commercial crime: Vandalism, personnel dishonesty, or forgery.
  • Boiler/machinery insurance: Equipment damaged by power surges or brownouts.
  • Extra expense: Temporary relocation of services during emergency building repairs
  • Perils insurance: Situations named based on the type of risk – earthquakes, tornados, sewage backup, etc.
  • Builder’s risk insurance: Damage to buildings that are under construction (theft of materials, fire, collapse of unfinished structures, etc.)

Liability Insurance

Liability insurance covers unintentional negligence on the part of your library that causes injury or perceived injury to others or to their property, which may result in liability lawsuits or claims against a library.

Considerations for liability insurance policies:

• Commercial general liability coverage: Out-of-pocket expenses for individuals injured at the library, including volunteers; lawsuit claims of libel/slander; negligence
• Data breach / Cyber Liability Insurance: Protects the library from liability related to theft/loss of data and other expenses incurred from breach of privacy
• Employment Practices Liability Insurance (EPLI)- Nonprofits are not immune from claims of sexual harassment, discrimination, wrongful termination, negligent evaluations, infliction of employee duress, and similar claims. Employment practices liability insurance protects your nonprofit from claims where employees alleged your nonprofit is responsible for violating their legal rights as employees. Some insurance providers allow you to add this coverage onto your D&O insurance policy at a slightly higher premium.
• Employee Dishonesty Coverage: Employee theft of money, securities, property, etc.
• Special events insurance: Supplemental general liability and liquor liability coverage.
• Beyond insurance policies: Consider requiring all independent contractors/performers to provide certificates of insurances and clearances prior to working at the library or events.
• Commercial auto policies are needed if employees operate any vehicles for library business. (eg. the library owns a vehicle, rents a vehicle, or an employee uses a personal vehicle for work functions beyond their commute)

Directors & Officers Insurance

Directors & Officers Insurance, while not required, is a highly recommended type of liability insurance. While federal and state laws, in many cases, protect individuals if they have acted in good faith, it’s not always enough. D&O coverage provides liability coverage of personal assets for wrongful act allegations of a board of directors. It covers board decisions for litigation regarding breach of duty, neglect, misstatements, inadequate disclosure, and misleading statements. The insurance covers damages that, under the law, the library would be required to pay. Note: This covers board members, NOT executive directors.

Workers’ Compensation

Workers’ Compensation is a type of liability insurance required by organizations with part-time and full-time employees, even if those employees are family. Coverage ensures medical and wage-loss benefits to employees who are injured while on the job. Employers who provide coverage are protected against lawsuits filed by injured workers.

PA Department of Labor & Industry: Workers’ Compensation Insurance (Website)

PA DLI: Your Guide to Workers’ Compensation Insurance (PDF)

Employee Perspective: Workers’ Compensation and the Injured Worker

Unemployment Compensation Tax (*Insurance for employees, a tax for employers)

Unemployment Compensation (UC) protects workers who experience job loss by providing temporary income support to people who become unemployed through no fault of their own. If employment is covered under the PA UC Law, employers are responsible for UC coverage of their employees. PA Office of Unemployment Compensation

Certain nonprofit employers have a choice of two methods of financing this coverage:

• Contributory: Employers pay contributions to the UC fund annually; employee contributions are submitted with quarterly payroll taxes
• Reimbursable: Employers may elect, if qualified, to reimburse the UC Fund for the amount of benefits chargeable to the organization’s account on a dollar-for-dollar basis.