Nonprofits share the same types of liability concerns that regular businesses face.
Like a business or a homeowner, a nonprofit organization needs to protect its property from loss by fire, theft, and lawsuits as well. Without insurance, a lawsuit could prove financially devastating.
There are many aspects to property insurance. If your organization owns real estate, you will want to insure the property. If it rents or leases its premises, you may want coverage for tenant’s improvements and betterments. These are fixtures, alterations, installations or additions that you have put into the space that cannot legally be removed from the landlord’s premises.
Depending on the particulars of your activity, you may want to add other coverages, such as Theft and Burglary, Employee Dishonesty or Electronic Data Loss.
Nonprofits have no immunity from lawsuits. Clients, volunteers, vendors, donors or visitors may sue if they are accidentally injured on your premises or while on business for the organization. Someone may sue claiming libel or slander. Employees may sue claiming discrimination or sexual harassment. Liability insurance covers these risks. Before buying insurance, it’s a good idea to consider the particular loss exposures you have and buy a policy that addresses them. If, for example, your organization is made up mostly of volunteers and has no paid staff, your best choice could be a policy that covers only volunteers.
Anyone driving a personal auto on business for a nonprofit organization will have coverage under their personal auto liability policy. If the personal policy has low limits, however, they could quickly be exhausted by an accident with serious injuries. An injured party might then sue the nonprofit group. You should discuss with us whether the organization is adequately protected.
Workers Compensation Insurance
States have varying rules about when an employer must provide workers compensation insurance. If you have paid employees, you should check with your state department of workers compensation to see if you are required to provide workers comp insurance for your nonprofit organization.
More Business Insurance Links
Almost every business may face a loss due to its owning, renting, using, or loading/unloading a vehicle. Most coverage needs can be handled by a business auto policy (BAP) or similar form. BAPs may cover a variety of operations, including trucking, garaging, public and private transport, and businesses with auto exposures that fall outside the other classes.
Workers Compensation insurance policies actually provide two types of protection. One covers the cost of medical expenses and disability payments if employees are injured or exposed to illness-causing substances while on the job. The other provides businesses with liability protection in case they are sued for damages arising from employment-related accidents or diseases
Commercial property policies provide coverage for buildings and personal property that are used in a business. Protecting this property must be a primary goal of any commercial insurance program. Regardless of the size of the business, tangible property usually represents a large portion of its total assets.
Whether a human services, arts, educational, civic or other type of nonprofit, your organization should be protected by liability insurance to cover defense costs and damages. Some insurers specialize in coverage for nonprofits and may be able to best meet the insurance needs of your organization.
Commercial General Liability (CGL) Policies are extremely broad in nature. They insure the bodily injury liability and property damage liability exposures of a variety of commercial businesses, enterprises and ventures.
A Commercial Umbrella Liability Policy, increasingly referred to as an excess policy, can provide an additional layer of insurance protection to handle major losses. A business owner may consider an accident that does not involve a fatality to be one that can readily be handled by regular coverage. The reality is that such an accident may result in substantial medical care, lost income and other expenses.
If you own a small business, your insurance needs may be properly handled by a business owner policy or BOP. BOPs are similar to a homeowners policy, offering both property and liability protection. Businesses such as retailers, wholesalers, small contractors, artisan contractors, dry cleaners, restaurants, offices, and convenience stores (including those with gas pumps) are eligible for BOP coverage.
As opposed to insurance, which is a two (2) party contract between an insurance company and the insured, a surety bond is a three (3) party agreement between a Principal, an Obligee, and a Surety.
Frequently people go for years without reviewing their insurance program, even though life quickly changes. By answering a few questions, you can have the peace of mind knowing that your family and possessions are protected.