A nonprofit is more than a charity, it’s an organization that strives to serve the community. Just like any other business, nonprofits face many risks that can cause damage to the organization or its members and donors. Those risks include property damage, lawsuits and loss of funding or resources. Fortunately, there are several types of insurance that can help protect your nonprofit from financial disaster.
Nonprofits need to be aware of the different types of insurance available, so they can determine what is best for their specific organization. Doing research on the various options can give them a better idea of what to look for in an insurance policy and help them determine whether they need to add additional coverage for a particular risk or increase the limit on existing coverage. Often, nonprofits need a variety of policies because their operations vary in size, location and type of work.
Most nonprofits need to carry at least two primary types of insurance: general liability and directors & officers (D&O) insurance. This coverage will typically protect the organization from common incidents that occur, as well as help them qualify for certain contracts and leases.
General liability is one of the most important forms of insurance for a nonprofit, as it can help cover the cost of legal fees and damages incurred by third parties who may become injured due to the actions of the nonprofit organization. This includes slip and fall accidents, as well as more serious issues such as property damage and false advertising claims. It can be bundled with commercial property insurance in a business owners policy, which is often much cheaper than buying the two separate policies.
Another type of essential nonprofit insurance is commercial auto. This type of policy will protect your nonprofit organization if an employee or volunteer is driving on behalf of the nonprofit and has an accident. It can also extend to vehicles that are not owned by the nonprofit, such as a donated car or van. This type of coverage is often required by foundations before they will grant a nonprofit an in-kind donation or grant money.
Almost all nonprofits host special events and fundraisers, which means that they need extra protection to cover the potential damage that might result from an event. Additionally, nonprofits tend to have multiple locations from which they operate, ranging from donor’s homes and municipal buildings to hotels and event venues. All of these places need to be covered by a good commercial property insurance policy, and often, it’s included in the same bundle that contains general liability and D&O insurance.
In addition to these key policies, your nonprofit might need a few other types of insurance coverage, depending on its needs and the industry in which it operates. These may include a commercial umbrella policy, professional liability coverage, employment practices liability insurance, fiduciary liability coverage and international coverage. If you’re looking for a nonprofit insurance provider that can provide a full suite of products and services, consider The Hartford, which is renowned for its customer-focused approach and tailored policies. do nonprofits need insurance