Contracts

Contracts are a legally enforceable agreement between two or more persons or organizations. All contracts must be approved by the PTA membership and signed by two elected officers, one of whom must be the president.

When entering into a contract, the president is responsible for the agreement and should clearly identify that it is the PTA entering into the contract and not the president as an individual. The signature on a written contract should read, "_______ PTA by President and (name) , officer."

Receive the contract in writing. Understand the terms and conditions of the contract. Have the contract reviewed by legal counsel if needed. Ensure that the length of the contract is limited to the current membership year and does not encumber future boards.

Hold Harmless Agreement

Never sign a Hold Harmless Agreement on behalf of the PTA. If the school district requires the PTA to sign a Hold Harmless Agreement for use of school premises, the PTA should contact the California State PTA insurance broker, Armstrong/Robitaille Insurance Services at 800.733.3036. The insurance broker may then direct the signing of a Facilities Use Permit Addendum (Forms 403).

PTA is required to obtain a Hold Harmless Agreement and Evidence of Insurance from each vendor, concessionaire, or service provider who is used (Hold Harmless Agreement, Forms 407). Instead of providing Evidence of Insurance to each individual unit, the vendor, concessionaire, or service provider may file an annual copy of coverage with the California State PTA insurance broker.

A list of vendors, concessionaires, or service providers who have Evidence of Insurance on file with the California State PTA insurance broker is included in the Insurance and Loss Prevention Guide. These vendors, concessionaires, and service providers do not need to sign the Hold Harmless Agreement or provide a copy of their insurance, if the policy has not expired. If the date on the list has expired, call the California State PTA insurance broker.

In a Hold Harmless Agreement, the signing party assumes responsibility for all acts and all liability for any injuries that occur related to an event (Hold Harmless Agreement, Forms 407).

Bonding and Insurance

As a protection for all PTA districts, council, and units the California State PTA has contracted for General Liability, Directors and Officers Liability, Bonding, and Workers' Compensation insurance coverage. Certain activities and events are prohibited either because they are excluded by the insurance policy or because they are dangerous or jeopardize the safety of children and youth.

There is no distinction between student and adult members with the insurance broker.

Participation in the California State PTA insurance program is required for all PTA districts, councils, and units. The California State PTA arranges coverage; districts are notified of the cost for insurance in the fall. Premium costs vary depending on statewide losses during previous years.

Insurance premiums are not refundable. The premium must be forwarded through PTA channels to be received in the California State PTA office by January 31, or a late fee of $25 will be assessed by the California State PTA. Postmarks will not be accepted.

District PTAs will notify their units annually of the current premium costs and the date premiums are due to district. Premiums are not to be sent directly to the California State PTA. The insurance term of coverage is one year from January 5 through January 4.

Details regarding coverage and required annual payroll reporting of Workers' Compensation are furnished to PTAs through articles and inserts in PTA in California (the California State PTA newsletter), through service mailings, and through other direct mailings from councils, districts, and California State PTA.

PTAs will be assessed a $25 late fee for insurance premiums postmarked after January 31.

In circumstances where a unit, council or district PTA is hiring part-time or full-time employees and the aggregate total cost of the employee wages is in excess of $1000.00, the California State PTA will bill the unit, council or district PTA additional monies to help cover the cost of the increased premiums of Workers' Compensation Insurance coverage, as needed. Charges/fees will be based on the insurance rate charged by the State Fund,Workers' Compensation Insurance Provider.

COMPREHENSIVE GENERAL LIABILITY

Coverage with a $1,000,000 limit covers all unit, council and district PTAs when involved in allowable PTA activities. It protects all members, in case they are held legally liable for bodily injury or property damage to another person that resulted from an allowed event. This is not a medical policy, but a policy that pays because an individual is held legally liable. If someone is injured but the injury is not a result of PTA negligence, the individual should utilize his or her private medical insurance coverage.

DIRECTORS AND OFFICERS LIABILITY

Coverage with a $1,000,000 limit covers all unit, council and district PTA officers. It provides defense and protection if a director, officer, or member of PTA is sued for failure or alleged failure of a member to live up to the responsibilities and duties assumed as a member of the PTA.

BONDING INSURANCE

Bonding insurance covers all PTA districts, councils, and units and all persons handling funds and PTA assets. The basic bond provides $15,000 Employee/Volunteer Theft; $15,000 Forgery; and $15,000 Theft, Disappearance and Destruction of money or scrip. There is no coverage under the bond for wire transfers. There is a $500 deductible.

Higher insurance limits can be obtained for an additional cost directly from the insurance carrier. If the unit wishes a higher limit, one may complete the form "Excess Crime Bond Application" in the Insurance and Loss Prevention Guide. (Higher limits are recommended for units purchasing scrip.)

Claims must be reported in a timely manner. As soon as a bond incident investigation is initiated, it should be reported to the Insurance Broker.

WORKERS' COMPENSATION INSURANCE

The California State PTA carries Workers' Compensation insurance for all operations of the PTA in order to comply with the State of California Workers' Compensation Law. The law requires that any organization considered to be an employer in the state must provide protection for its employees (California Labor Code, para. 3700). Any PTA that pays wages directly to an individual and reports said employment on the Workers' Compensation Annual Payroll Report (Forms 399) must comply with this mandate.

The Workers' Compensation system was designed to provide prompt and effective medical care to workers injured on the job and to provide replacement of a portion of wages lost while a worker is recovering from an injury.Workers' Compensation insurance protects the employer against losses due to work-related accidents and illness. The California Workers' Compensation system is a no-fault system, which means an injured worker is entitled to benefits without regard to negligence or fault. For procedures when an employee sustains an injury on the job, see Workers' Compensation Insurance (5.6.4, 237).

Insurance and Loss Prevention Guide

The Insurance and Loss Prevention Guide is designed to help unit, council and district PTAs select fundraising activities, sponsored programs, and events. It outlines the risks associated with planned activities. The guide is mailed to unit, council and district PTAs annually in November.

It is critical that before planning any PTA activities the Insurance and Loss Prevention Guide be consulted.

The Insurance and Loss Prevention Guide provides direction on the programs and events in which a PTA may participate. It is divided into three sections: Red Light, Yellow Light and Green Light.

Red Light includes the prohibited activities and events that are not covered under insurance for the PTA.When a PTA sponsors or conducts an activity listed in the Red Light Section and someone is injured because of PTA negligence, the individual PTA officers could be held personally liable. Child care programs are not covered under the California State PTA comprehensive general liability insurance policy. If the unit PTA sponsors such a program, it must purchase separate insurance for the program.

The California State PTA strongly urges unit, council and district PTAs to refrain from serving alcoholic beverages at PTA functions. PTAs may not engage in the sale of alcoholic beverages. See the Insurance and Loss Prevention Guide, Red Light Section.

Although child care programs are not covered, baby-sitting services during meetings and events when a parent is on the premises are acceptable and encouraged when following appropriate guidelines (PTA Provided Baby-Sitting Services, 5.8.5, 245).

Yellow Light includes the cautioned activities and events. Participation in these activities may require additional insurance coverage, waivers of liability, and certificates of insurance. PTA must strictly adhere to PTA guidelines and/or other special arrangements. PTA must meet all stipulated conditions and must consult the insurance broker prior to undertaking these activities.

Green Light includes the approved activities and events.

REPORTING INCIDENTS

The Incident Report Form (available in the Insurance and Loss Prevention Guide) must be completed by the PTA president. It is a confidential communication between the PTA and the California State PTA insurance broker, informing the insurance broker of the potential problem. It is not a claim; it is merely notification of an incident. The Incident Report Form is not to be completed by the injured party. However, the PTA president may ask the injured party questions that will facilitate accurate completion of the Incident Report Form. When completing the form, follow the directions in the Insurance and Loss Prevention Guide.

VENDORS/CONCESSIONAIRES/SERVICE PROVIDERS

It is crucial that vendors, concessionaires, and service providers have their own insurance to reduce the possibility that the PTA unit will be held liable for the activity. PTA is required to obtain a signed Hold Harmless Agreement and Evidence of Insurance from each vendor, concessionaire, or service provider who is used (Hold Harmless Agreement 5.5.2, 232, Forms 407).

A current listing of those vendors/concessionaires/ service providers who have a copy of their certificates of liability insurance coverage on file with the insurance broker is included in the Insurance and Loss Prevention Guide mailed to all unit, council and district PTAs in good standing each year. Additional copies of the list may be obtained by contacting the California State PTA insurance broker.

Special Request for Professional Opinion

In circumstances where professional, expert advice is requested due to a unique situation in a unit, council or district PTA, the California State PTA will contact the appropriate professional provider, as needed. Charges/fees incurred will be billed to the appropriate PTA benefiting from the advice.

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