Non-profit organizations (or NPOs for short) typically have a mission to serve the greater good. But they still operate just like any old-fashioned for-profit businesses. And that means identifying risks and finding protection from unforeseen events is key to survival. And a comprehensive non-profit business insurance portfolio is the best way to protect your organization from disaster.
Fortunately, our independent insurance agents are here to eliminate the hassle of searching on your own by walking you through a hand-picked selection of top insurance policies to cover both your business and your employees. But first, let’s talk more about the protection you need and why you need it.
Insurance Risks for Non-Profits
Why Do I Need Non-Profit Insurance?
What would happen if a member of your board were sued for some type of negligence? Are you covered for all of the additional risks that are present when you host special events offsite? If your basic business insurance policies exclude coverage for certain types of lawsuits, one accident or lawsuit could force you to close.
An independent insurance agent can help you uncover all of the risks to your non-profit organization. You may find combining a variety of non-profit insurance policies is what you need to get the full coverage your organization needs.
What Types of Insurance Do Non-Profits Need?
A basic non-profit organization insurance plan includes both commercial general liability insurance and property insurance. Larger non-profits may need more, however, to help cover buildings they own, vehicles, and other forms of business property. You may also need coverage for special events, and extra add-on liability insurance policies.
Commercial general liability (CGL) insurance is essential for any business, especially for any business or organization that regularly associates with the general public, on- or off-premises. CGL insurance protects your non-profit from lawsuits related to third-party bodily injury or property damage. This can be as simple as a slip, trip, or fall in your office, or serious injury, even death, caused by your organization.
If an incident like that occurs and you’re found to be at-fault, your CGL policy will pay for medical expenses, costs to repair or replace damaged property, attorney fees, court costs, and any settlements or judgments that you must pay. CGL insurance also covers certain personal injury claims (slander and libel) and advertising liability claims.
Many small non-profits may not have a lot of business property. But if you have office space, office equipment, furniture, computers, and other electronics, you need business property insurance. This coverage helps protect your organization from fires, smoke damage, theft, vandalism, and certain weather events.
If you own your building, your commercial property policy also covers damage to it. Your property policy may also include business interruption coverage, which provides income replacement and reimburses you for certain ongoing expenses (salaries, rent) if you need to close or relocate temporarily after a covered loss (e.g., a fire).
Non-profit insurance policies almost always exclude coverage for flood damage.
You may need to purchase a separate flood insurance policy if your location is susceptible to flooding.
Depending on the size of your non-profit and the work you do, you may qualify for a business owners policy (BOP); this type of policy offers liability, property, and business interruption coverage all in one affordable package that’s perfect for small- to mid-sized businesses.
If you run your non-profit out of your home, talk to your independent insurance agent about amending your homeowners insurance policy to include coverage for your business property and any business-related liability risks you face. You may need to purchase special coverage for home-based businesses.
Why is Directors and Officers Liability Coverage Important?
Lawsuits are probably the greatest risk for any non-profit. And while your CGL policy offers broad coverage that protects against a wide variety of potential lawsuits, you may be exposed to other types of lawsuits that aren’t covered.
The directors and officers who serve your NPO must maintain the organization’s financial stability and provide the appropriate resources and environment in order for it to flourish. But nearly any decision that your board makes can trigger a lawsuit, which can hurt the NPO and threaten the personal assets of the directors and officers. All of this calls for another form of non-profit liability insurance.
Non-profit directors and officers (D&O) liability insurance protects the assets of individual directors and officers, employees, and your NPO from certain allegations. Policies vary by insurance company, but standard D&O policies provide coverage if you’re sued for:
- Civil rights violations
- Conflicts of interest
- Statute violation
- Violation of by-laws
- Breach of contract or fiduciary duty
- Financial mismanagement
- Mistakes or errors of judgment
D&O liability insurance pays for your defense costs, damages, settlements, and judgments related to a covered complaint. It’s generally tailored specifically for the organization and the type of work that you do.
Non-profit D&O liability insurance protects the assets of your directors and officers, their spouses, domestic partners, heirs, and estates.
You may also want to purchase employment practices liability insurance. This policy offers coverage for employment-related discrimination claims by prospective, current, or former employees. Your D&O policy may specifically exclude coverage for these kinds of claims, so be make sure you’re clear on what’s covered (and what’s not) by both policies.
Workers Compensation Insurance Protects Your Employees
Your NPO probably has employees, just like any other business. And if you do, you need insurance that protects your employees from workplace injuries and illnesses. Workers compensation insurance covers medical expenses and helps replace and employee’s income if they’re injured on the job.
Many non-profits use volunteer workers to perform a wide variety of tasks. Each state has different workers compensation laws, and they vary on whether volunteers can, or must, be covered by workers compensation insurance. In states where volunteers cannot be covered, or where it’s only optional, NPOs may choose to purchase special accident medical reimbursement policies to help cover themselves.
An independent insurance agent who specializes in workers compensation insurance can help you determine how to best protect your volunteer workers.
Special Event Coverage for Non-Profit Organizations
Special events like fundraisers, dinners, auctions, and golf tournaments may play a huge role in your non-profit organization. But does your general liability insurance policy provide all the coverage you need?
Many special events involve renting space and inviting people to participate. They also often involve serving alcohol and participating in athletic activities and other high-risk activities like bounce houses, carnival rides, or swimming. If someone is injured or property is damaged at one of these vents, your CGL policy might not provide the coverage you need.
Talk to your agent about whether your CGL policy excludes special events. If it does, you’ll need special event insurance, which is extra coverage for a one-time event or a series of events, depending on your needs. These policies often include liquor liability coverage, which protects your NPO from alcohol-related injuries or property damage.
Additional Coverage for Non-Profits
Depending on your organizations, you may need to consider additional protection, like:
- Commercial auto insurance: This covers vehicles that are owned or rented by your NPO, or any personal vehicles that are driven for business purposes.
- Excess liability insurance: Also called commercial umbrella insurance, this provides additional liability protection above and beyond the liability limits of your other liability policies.
- Professional liability insurance: This offers protection for claims of professional negligence, errors, or omissions. It may be particularly important if your non-profit provides counseling or other professional advice-based services.
A local independent insurance agent can help you find the non-profit insurance policies you need, and customize them to protect against the specific risks you face. Our agents have experience putting together customized insurance plans for non-profits and can work with multiple, highly rated insurance companies, so you can obtain several quotes quickly without doing the work on your own.
Finding and Comparing Non-Profit Insurance Quotes
Our agents will review your needs and help you evaluate which non-profit organization insurance coverages makes the most sense. They'll also compare policies and quotes from multiple insurance companies to make sure you have the best protection out there. They'll hook you up — in a comprehensive and affordable way.
What's So Great About Independent Insurance Agents?
Independent insurance agents excel at matching the most appropriate policy to the business in need. Shopping around for insurance policies can be tricky, confusing, and time-consuming, and an independent insurance agent's role is to simplify the process.
They’re also there to help make sure you get the absolute best deal, and the one that meets your unique needs. They shop and compare insurance quotes for you, and they'll break down all the jargon so that you understand exactly what you're getting.