If you are a nonprofit organization, then you have unique challenges that need to be addressed. These challenges include fundraising, financing, staffing and more. One of the most important issues that must be addressed is insurance coverage for your organization. The type of insurance that you need is highly specific to your organization and will depend on the type of work your organization does. The best way to determine what coverage your nonprofit needs is to speak with an independent insurance agent who has experience working with organizations in your industry. These agents will be able to help you find the most appropriate and cost-effective coverage for your organization.
Typically, most nonprofits will need general liability insurance to protect against classic slip-and-fall accidents that might occur on the property of your organization. This policy may also cover damages awarded against your organization if a lawsuit is filed due to negligent acts such as libel, slander, and copyright infringement in connection with the operation of your nonprofit. Property insurance is also necessary for most nonprofits to have, as it can cover the space that your organization occupies as well as the fixtures, furniture and equipment in it. This can protect against damage or loss due to theft, fires, weather and more. Crime coverage, also known as a crime bond, is another area of insurance that many nonprofits need to have. This helps to ensure that any donations you receive are protected from unscrupulous individuals. Many municipalities and foundations require that you have this in place before they will award grants to your organization.
Directors and officers insurance, also called D&O insurance, is an important policy that protects the board members and, in some cases, other volunteers and staff from legal claims if they are sued for decisions made on behalf of the organization that result in financial loss. This is often needed in addition to workers’ compensation insurance, which should be obtained for all employees.
If your nonprofit offers coaching, counseling, educational services and mentoring, you should consider professional liability insurance as well. This type of policy covers your organization for any negligence in the services you provide to clients. This policy can also include a Directors and Officers (D&O) component that covers the board members for employment-related issues as well.
You can buy your nonprofit’s general liability, property and crime policies separately or you can get a business owners policy (BOP) that bundles these policies together at a lower rate than purchasing them individually. Some independent insurance agencies specialize in providing BOPs for nonprofits and can help you decide which one is the right choice for your organization.
Your local independent insurance agent can also advise you on any additional or specialty policies that your nonprofit might need. For example, if you have any valuable or expensive equipment that your organization uses in its operations, you can often get them covered under an inland marine policy, which is a separate insurance policy for things like computers and audio-visual equipment. what type of insurance does a nonprofit organization need