The Nonprofit:
A nonprofit provided transportation coordination services for seniors, people with disabilities, and others facing barriers to transportation. The organization acted as a transportation manager, connecting clients with third party operators that were selected based on client needs.
The Incident:
One morning, an elderly client was scheduled to be transported by a vehicle owned and operated by a contracted third-party vendor.
While unloading the client, the vendor’s driver did not properly secure the brakes on the client’s wheelchair. The wheelchair rolled down a driveway, causing the client to fall from the chair, strike their head, and sustain fatal injuries.
There was no known video footage of the incident.
The Legal Action:
The client’s family retained legal counsel and filed two lawsuits against both the vendor and the nonprofit. One lawsuit alleged wrongful death, and the second alleged emotional distress suffered by a family member who witnessed the incident.
The nonprofit was included in the lawsuits due to its role in referring the client to the transportation vendor.
The Coverage:
The nonprofit reported the matter to its insurance broker and made a claim under its Commercial General Liability insurance policy with Nonprofits Insurance Alliance (NIA). Defense counsel was provided to represent the nonprofit.
The Result:
The claim involved extensive investigation and legal review and was ultimately resolved.
Things the Nonprofit Did Well:
The nonprofit maintained documentation related to its vendor selection process and the referral arrangement for transportation services.
The organization reported the incident promptly and cooperated fully with the claim investigation and legal proceedings.
How Can Your Nonprofit Protect Itself?
Nonprofits that rely on third party vendors sometimes consider how vendor qualifications are reviewed, how responsibilities are documented, and how incidents are reported and recorded.
Clear contracts, documentation, and communication can help organizations respond more effectively when serious incidents occur and support the defense process if claims arise.
From the Claims Files stories are for general information only. They are simplified examples and do not guarantee coverage, a defense, or any specific outcome. Some losses described in this series may not be covered.
Coverage depends on the specific facts and on the terms, conditions, and exclusions in your policy. Contact your insurance broker or agent for guidance, and follow your policy’s claims reporting procedures if an incident may involve a claim.
This story is not legal, medical, financial, or professional advice. In an emergency, contact local emergency services first. Any risk management practices mentioned are general suggestions and may not apply to every nonprofit. Follow all applicable laws, licensing rules, and reporting requirements.
