There are currently more than 21,000 registered nonprofit organizations in the state of Arizona. Collectively, these groups hold nearly $48 billion worth of assets and generate revenues of about $28 billion a year. Nonprofit insurance protects these organizations from large financial losses when disaster strikes. That way, they can focus on providing support and services to those in need.
If you run a nonprofit organization in this state, a local independent insurance agent can help you obtain the coverage you need at a price you can afford. Talk to an insurance agent near you to learn more.
What Could Go Wrong at a Nonprofit Organization?
Just like any for-profit company, nonprofit and charitable organizations face risks that can lead to large financial losses. Consider how your organization would handle the associated costs in the following situations if it did not have insurance.
- A fire breaks out overnight at your main office and destroys several laptops, desks, filing cabinets, and other property.
- At the conclusion of a large fundraising drive, it is discovered that your group’s treasurer has stolen tens of thousands of dollars to cover gambling debts.
- A mental health patient being treated at your facility commits suicide while in your care and their family files a lawsuit.
- An employee of your organization is severely injured while operating a forklift in your group’s warehouse.
- A volunteer of your organization loses control of the company van while driving supplies to a homeless shelter and this results in a multi-car collision.
These are just a few examples of times that having nonprofit insurance can prove beneficial.
What Is Nonprofit Insurance?
Nonprofit insurance is a term used to describe a business owners policy (BOP) or a business insurance policy package that has been customized to meet the specific coverage needs of not-for-profit organizations.
Examples of the types of Arizona nonprofit companies that can benefit from this insurance include the following.
- Community health clinics
- Historical societies
- Arts and cultural groups
- Fundraising organizations
- Homeless shelters
- Mental health facilities
- Parent-teacher associations
- Educational societies
If you run a not-for-profit organization in Arizona, be sure to discuss how a comprehensive nonprofit insurance policy can provide you with peace of mind so you can focus on your group’s important mission.
How Much Does Nonprofit Insurance Cost in Arizona?
On average, nonprofit organizations pay about $800 a year for their insurance coverage. The costs you will be expected to pay could be significantly higher or lower than this average rates depending on a number of factors such as the following.
- The type of organization you are insuring
- The size of your organization and its expected annual revenues
- The value of your organization’s assets
- The number of employees and volunteers who work for you
- Whether your nonprofit organization owns or uses vehicles
- Whether your group owns or rents the space where it operates
- The amount of your deductible
The only way to find out how much a policy will cost for your nonprofit organization is to request customized quotes from insurance companies. Independent agents can save you time by obtaining these quotes on your behalf.
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What Does Arizona Nonprofit Insurance Cover?
As with any business insurance policy package, your nonprofit insurance can provide as much or as little coverage as your organization needs.
A local independent insurance agent can help you assess your nonprofit’s risks and exposures and can recommend the right insurance policies to cover against each of them. Some types of coverage that your agent may recommend including in your policy package include the following.
- Directors and officers liability insurance (D&O): Most nonprofit groups work under the advisement of a board of directors and officers. This insurance is designed to protect these individuals as well as your organization if a lawsuit is filed because of a bad management decision.
- Property insurance: This is designed to cover your organization’s property if it is lost or damaged due to a covered event like theft, fire, or severe weather.
- General liability insurance: This is designed to cover your nonprofit organization against many common liability risks such as if a third party is injured on your organization’s property or if your group is accused of libel or slander.
- Workers’ compensation insurance: This is required by the state of Arizona if your nonprofit organization has at least one employee. It is designed to cover the cost of medical treatments and disability pay if an employee is injured on the job.
- Employment practices liability insurance (EPLI): This is designed to protect your organization if a current, former, or prospective employee makes an accusation of illegal employment practices such as discrimination or wrongful termination.
- Professional liability insurance: If your group provides professional services such as counseling or medical treatments, the professionals that provide these services are at risk for potential lawsuits against them. Professional liability insurance is designed to protect these individuals.
- Commercial vehicle insurance: If your nonprofit organization is listed as the owner of a vehicle or fleet of vehicles, these vehicles will need to be covered by a commercial vehicle insurance policy that meets or exceeds Arizona’s coverage requirements.
- Non-owner car insurance: If your employees or volunteers use their personally owned vehicles to do work for your organization, your group can be sued if they cause an accident while working. Non-owner car insurance can protect your nonprofit with sufficient liability coverage.
- Cyber liability insurance: If your nonprofit organization electronically stores data such as donor names and credit card numbers or personal information about the people you are helping, this information may be obtained by cybercriminals if they hack into your group’s computer system. Cyber liability insurance is designed to cover your organization’s financial obligations to affected individuals.
- Fidelity bonds: Fidelity bonds can protect your business if employees or volunteers engage in illegal or dishonest acts, such as if someone working for you illegally embezzles funds or steals from those that your group is helping.
This is not a complete list of insurance policies that are available. Not every type of policy is right for every type of nonprofit organization, so it helps to work with an independent insurance agent who is familiar with the many different types of coverage that you can include in your policy package.
How an Independent Insurance Agent Can Help You Find the Best Nonprofit Insurance in Arizona
The mission of your nonprofit organization is too important for you to be wasting time trying to understand the ins-and-outs of your various insurance options. Let a local independent insurance agent assess your group’s risks and recommend appropriate policies and options to cover against them.
Because they are not tied to a single insurance company, these agents are free to shop around to find you the best and most affordable policies. There are more than 400 independent agents in Arizona, so it should be easy to find an insurance agent near you.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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