Nonprofits have a lot on their plates, from fundraising to serving the needs of their clients. Despite their best intentions, accidents can happen, and without the proper nonprofit insurance coverage, they could be facing costly legal fees.
While they may not have the same commercial goals as for-profit businesses, nonprofits still operate in a similar corporate structure and are just as vulnerable to lawsuits. As such, they require a wide range of insurance policies to protect them from the risks that come along with running a business.
There are a number of different types of policies that a nonprofit will need, including general liability insurance, directors and officers (D&O) insurance, crime/fidelity coverage, commercial auto insurance, employment practices liability insurance, and cyber liability insurance. While some of these insurance policies are available as standalone products, they can also be bundled into a single business owner policy (BOP) that contains all of the main coverages that a nonprofit will need.
In addition to traditional business insurance policies, a nonprofit should consider purchasing a non-owned auto insurance policy to cover any damages or losses caused by volunteers and employees who drive their personal vehicles on behalf of the organization. For example, if an employee or volunteer gets into an accident while taking seniors to doctors’ appointments, delivering library books to clients, or visiting local businesses for sponsorships and in-kind donations, their own personal auto insurance will typically pay the claim first. If their personal insurance limits are too low or the nonprofit does not have its own auto insurance, this type of policy will ensure that the company is protected.
The type of insurance a nonprofit requires will depend on the industry it operates in, its activities, and the number of employees and volunteers. However, the Balance reports that most charitable organizations will need to purchase a general liability policy and a D&O insurance policy. Additionally, it’s likely that the organization will need workers compensation coverage if it has any full-time employees.
While obtaining the right type of nonprofit insurance can be challenging, it’s important for charitable organizations to work with an independent insurance agent who can provide a full review of their current policies and advise on any gaps in coverage. An agent who specializes in working with nonprofits can help them find the coverage they need at rates they can afford. They will also be able to offer advice and guidance on how to avoid common risks that can impact the success of a nonprofit, such as sexual abuse or a data breach. Insurance can be expensive, but it’s an essential investment for nonprofits to make in order to safeguard their operations from financial setbacks. To learn more about the benefits of having a dedicated agent on your side, contact Council Services Plus to get started with a free insurance review for your nonprofit organization today! do nonprofits need insurance