Americans are very generous. On average, each American household donates approximately $400 to charitable organizations each year. These groups work hard for the betterment of society. Just like any business, however, charities do not operate without risks. Fortunately, they can be protected by business insurance plans designed specifically for organizations that operate under a charitable business model.
While all charities are non-profit businesses, not all non-profits are charities. Charitable organizations center on philanthropy or serving the public’s interest or well-being. These groups can include educational, religious and fundraising groups as well as foundations. In the United States, most non-profit organizations pay taxes, but charitable organizations are exempt.
Some charities operate as private foundations. These private groups generally receive outside funding through a benefactor such as a person, family, group or corporation. Public charities generally operate on grants from the government or from private foundations. The groups may not fit the typical business model, but they are still businesses and need to be insured accordingly.
Like any business organization, charitable foundations need to protect assets and finances with a suitable business insurance policy. Charity insurance policies are designed specifically to meet the unique coverage needs of these groups. If you own or run a charity, it's a good idea to be sure that you are fully covered for losses and damage. Some coverage options to consider include:
We live in a litigious society. It is therefore very important that businesses, including charities, are protected by adequate liability insurance. Some liability insurance that may interest charities includes:
Your charity may have a lot of valuable property including computers, telecommunication systems, office furniture and supplies. If this property were to be lost or damaged in a catastrophe or burglary, you could receive compensation for these losses through charity insurance property coverage.
When you purchase your policy, you will want to be sure that you are purchasing enough coverage to allow you replace all your lost items in the event of a total loss. Many plans will allow you to purchase coverage at your items actual depreciated value, or you can pay more for replacement-value compensation.
Some specialty items, such as custom-made equipment or expensive electronics may require an additional rider in order to be fully covered under your insurance plan.
Charitable organizations and private foundations typically operate under the management of a board of directors. The members of these boards often work for free or for a nominal fee. It is important to be able to attract talented and well-connected board members to help with fundraising. This will be easier to accomplish if your organization carries directors and officers insurance.
Many people think that that those who work for a charity would not be likely to sue their employer. This is not the case. Directors and officers insurance can protect your charity’s management team from claims of improper actions such as sexual harassment, discrimination, wrongful termination or misuse of the organization’s funds.
Even if the claims are frivolous, the necessary legal fees to build a defense can often be very high. It's a good idea to make sure you can weather any financial storm with the right insurance in place.
Charity insurance policies offer additional coverage options. Some insurance your charitable organization can benefit from includes:
Shopping for insurance for charitable organizations can often be confusing. It's a good idea to build a policy that is right for the unique needs of your organization, just be sure that you are not paying too much for coverage.
When you're looking for the best charity coverage for your organization, it's a good idea to find a trusted:
When you consult with experts, you'll get a better picture of what's required of you. But your search won't end there. It's highly recommended that you seek out at least 3 quotes for similar coverage from different insurers before you buy. With precious funds at stake, it's important to get a bigger picture of what charity insurance costs, and what that investment is going to do to help your organization succeed.