Nonprofits face a unique balancing act: Operating with the heart of a charity and the liability of a business. From volunteer mishaps to cybercrime, nonprofit organizations are exposed to a wide range of risks, and often on a shoestring budget. That’s why having the right nonprofit insurance coverage is not just advisable, but essential.
A recent article in Insurance Business outlines the diverse and complex risks these organizations face and offers an excellent primer for agents and their clients alike. Here’s a top-level look at the most important takeaways and why you should give the full article a read.
The Top 8 Nonprofit Insurance Coverages
1. General Liability Insurance
This is the foundation of any nonprofit insurance plan. It protects against claims of bodily injury or property damage caused by the organization’s activities or events. It may also cover reputational harm and advertising injuries.
2. Directors and Officers (D&O) Insurance
Even the most well-meaning board members are vulnerable to allegations of mismanagement, wrongful termination, or discrimination. D&O coverage helps shield your nonprofit’s leadership from personal financial loss.
3. Professional Liability Insurance
Think of this coverage as a complement to D&O insurance. Also known as errors and omissions (E&O) insurance, this policy covers not only executives but also staff and volunteers against claims of negligence, misconduct, or misrepresentation.
4. Property Insurance
This goes beyond protecting the physical building. Property insurance can help replace critical assets like office equipment, inventory, and supplies, which can be especially important in disaster-recovery scenarios.
5. Commercial Auto Insurance
Whether your nonprofit delivers meals, transports goods, or simply shuttles staff between locations, vehicles owned and used by the business must be insured under a commercial policy. This coverage typically includes liability, theft, and repair costs.
6. Crime Coverage
Unfortunately, nonprofits are not immune to internal theft, embezzlement, or fraud. Crime coverage helps recover stolen funds and protects against dishonest acts by employees, vendors, or even volunteers.
7. Cyber Liability Insurance
Nonprofits collect a surprising amount of sensitive information, from donor contact and financial data to client health records and volunteer background screening. Cyber liability insurance covers breach notification, legal fees, and potential penalties following a cyberattack.
8. Workers’ Compensation Insurance
If an employee is injured on the job, this coverage ensures they receive medical treatment, lost wage reimbursement, and disability benefits, all while helping protect the nonprofit from legal action.
Grow Your Book of Nonprofit Insurance Business
Agents looking to serve nonprofit and social services clients need to understand the intricacies of nonprofit risk management. In addition to informative articles, a specialty insurance provider or insurance program administrator can provide class-specific resources to share and discuss with clients, particularly as they weigh coverage needs against limited budgets.
MiniCo’s exclusive Nonprofit and Social Services program underwriters have deep experience in the risks facing your clients operating mission-focused organizations. Our specialists understand that no two nonprofits are the same, and MiniCo’s program offers producers like you unmatched flexibility in coverages, limits, and deductibles. Plus we offer risk management resources with real-world examples of potential exposures to assist your clients to select necessary insurance coverages and mitigate the risk of costly losses. Contact an underwriter to learn more.
