Organizations involved in political campaigns should ensure they have sound financial controls in place and take steps to minimize reputational damage to demonstrate they are a better insurance risk, experts say.
Political campaigns are akin to startups because they grow rapidly in a short period of time, said Caleb P. Burns, a partner at Wiley Rein LLP in Washington.
While some of the risks they face — such as auto liability — are similar to all businesses, other risks, such as defamation, tend to be much higher because of their association with political candidates, Mr. Burns.
“Having proper controls and steps in place to review high-risk activities and to ensure that funds or assets are not misappropriated can help mitigate potential claims,”; he said.
Because political candidates tend to make direct comments, it’s important that they work with their public relations staff to plan public comments and speeches in advance, said Holden McKinney, Fort Washington, Pennsylvania-based assistant vice president, professional lines, at Amwins Group Inc .
“People want to come across as genuine but trying to read from a prompter might be a better way to go about it,” McKinney said.
On the directors’ and officers’ liability insurance side, it’s important for organizations to have sound accounting principles in place and that they maintain good financial reports, he said.
“These organizations are heavy on donations of funds, so understanding their financial position, that they have checks and balances in place and that they’re following their mission” is important, said Lisa Rodriguez, Seattle-based senior vice president, executive accountability broker at Brown & Riding Insurance Services Inc.