Nonprofit Insurance

1. NONPROFIT INSURANCE EVERYTHING YOU NEED TO KNOW ABOUT INSURING YOUR NONPROFIT ORGANIZATION

2. Nonprofit organizations are involved with the public and various communities for their operations. • This exposes them to unique risks and uncertainties, from which they need to protect themselves. 

3. What Kind Of Risks Do Nonprofit Organizations Face? • Fraud, embezzlement, and misallocation of funds by employees or board members.    • Claims of negligence or breach of duty.    • Accidents and workplace injuries.    • Property damage.  • Losing data due to data breach.  

4. Nonprofit Insurance • Nonprofit insurance covers nonprofit organizations from the unique risks and uncertainties associated with their industry. Why Do You Need Nonprofit Insurance? • Nonprofit organizations deal with multiple stakeholders, such as employees, donors, volunteers, and government regulators. • Even if there is a small incident of misunderstanding with one of the stakeholders, they might have to deal with an expensive lawsuit.  • It is essential to have a nonprofit insurance to protect the organization, its assets as well as the stakeholders. 

5. What Insurance Policies Do Nonprofit Businesses Need? • Business Owner’s Policy   • Commercial General Liability Insurance   • Commercial Property Insurance   • Commercial Auto Insurance   • Worker's Compensation Insurance  • Professional Liability Insurance  • Employment Practices Liability Insurance  • Directors and Officers Insurance  • Cyber Liability Insurance   • Product Liability Insurance  • Event Insurance  • Fiduciary Liability Insurance  • Commercial Umbrella Insurance 

6. Business Owners Policy • This is a package policy that combines general liability insurance with commercial property insurance and business interruption insurance.  • It includes the following coverages: • General liability coverage  • Commercial property coverage   • Business interruption coverage • Having a business owners policy is cost effective as compared to standalone policies.   

7. Commercial Property Insurance  • This policy protects your company's premises and property such as building, office equipment, furniture, computers. • It covers the costs of vandalism, theft, fire, or any losses of these property. • For example, some goons in the locality broke the windows of your office building. This policy will cover all the losses resulting from the vandalism.

8. Commercial General Liability Insurance • General liability insurance protects your business from third party claims of: • Bodily harm: The policy covers costs of medical bills, court settlements, legal fees.   • Property harm: This policy pays for repair, replacement, and legal costs incurred by the loss of property.   • Advertisement harm: This policy covers any cost related to copyright and defamation lawsuits against the organization.  

9. Commercial Auto Insurance • This policy covers vehicles nonprofit business owns. • It provides auto liability and physical damage coverage in case of an accident.  • For example, you met with an accident on your way to the office in the firm's car. The accident damaged the headlights of your car. Commercial auto policy will cover the damages for you.

10. Workers Compensation Insurance • This policy provides payment to employees in the event of injury, disability, or death caused on the job.  • The coverages include medical costs, loss of income, and death benefits.  • This policy might not cover volunteers, interns, and students-in-training because they are not your employees.  • Having this policy is mandatory in few states even if you have a single employee.

11. Professional Liability Insurance  • This policy provides coverage for: • Claims of work-related errors and mistakes • Allegations of negligence • Failure to fulfill promised services • It also covers court fees, settlements, and other expenses in case of lawsuits. • For example, one of your donors asked for the financial documents to see the use of funds. However, there was a mistake in the representation of numbers in the documents. The donor decides to sue you for the errors. This policy will cover you in such scenario. 

12. Employment Practices Liability Insurance  • Employee related claims include: • Harassment • Discrimination • Violation of Family and Medical Leave Act • Wrongful termination • Such claims can damage the organization's reputation, finances, decrease employee morale, and disrupt business.  • For example, an employee files a claim against your organization for workplace discrimination. This policy will cover all the costs for youto fight the claim.

13. Directors and Officers Insurance • This policy is also known as board member insurance. • It protects the board of directors from possible lawsuits and the following claims: • Misuse of funds   • Embezzlement   • Wrongful termination of an employee   • Claims of harassment   • Negligence  

14. Cyber Liability Insurance • This policy protects a firm from damages of cyber-attacks such as data breach, cyber extortion, malware or ransomware. • Nonprofit organizations must get this policy as they are at high risk of such attacks. • Nonprofits usually store sensitive digital information such as donor details, client data, and employee records. • For example, your employee's computer gets infected by malware which exposes all the details of your donor. The donor decides to sue you for the loss they incurred. Cyber liability will keep you covered in this case.

15. Product Liability Insurance  • This policy covers any financial and legal damages that consumers incur due to consumption of the product a nonprofit sells.  • The damages can be a result of certain risks associated with product defects. Such as faulty product, design defect, malfunction or usage failure. • For example, your firm hosts a food carnival fundraising event, and one of the customers fall sick after eating noodles at the carnival. In such scenario, product liability insurance will cover the medical bills.

16. Event Insurance • Nonprofits regularly hold events such as fundraising, bake sales, and meetings.  • A minor mistake in the event can land you an expensive lawsuit. • Nonprofit event insurance covers both bodily injury and property damage to the attendees.    • For example, your organization hosts a charity ball event. One of your guest trips on the wet floor at the event and breaks her ankle. The guest sues you for the broken ankle. Event insurance will cover all the costs resulting from the incident.

17. Fiduciary Liability Insurance  • This policy is essential for nonprofit organization that provides benefits like retirement and health plans. • This policy will protect you from lawsuits arising from your fiduciary duties such as weak investment decision, and negligence of fiduciary duty.    Commercial Umbrella Insurance • This policy provides additional limits over commercial auto liability, general liability policy, professional liability, or directors and officers liability.  • Large-scale nonprofit organization should opt for this policy to have a wide coverage. • For example, many customers fall ill after consuming the food served at the food carnival fundraising event. The damage resulting from this incident might exceed the limits of your liability policies. Commercial umbrella policy comes to your rescue in such cases.

18. These are the major policies that are required for nonprofit organizations. Other applicable policies might be: • Nonprofits should consider getting Employee dishonesty and crime coverage to cover loss from employee theft or fraud.    • Volunteer accident insurance is also necessary as worker's  compensation policy does not include volunteers. This policy will cover volunteers in the event of injury, disability, or death in the course of your organizational work. 

19. If you want to learn more, click on the button here, or follow the link in the description below