A first-step guide and overview to help protect our local nonprofit organizations with Business Insurance
Nonprofits all have unique situations when it comes to the work they do and situations they can find themselves in through their day-to-day operations. Choosing the right insurance for your nonprofit is crucial for lasting operation.
Types of nonprofits most insurance companies cover are, but not limited to:
- shelters (animal shelters, shelters for abused women and children, homeless shelters)
- educational organizations
- arts and cultural organizations
- community health clinics
- environmental conservation organizations
- fundraising foundations/organizations
- mental health centers
- pet adoption agencies
- historical societies
General Liability & Commercial Property Package
General Liability insurance is a must for all nonprofits. As nonprofits often work with the public, your business is exposed to many risks – whether a guest slips and falls at your community center or there is damage to a client’s property. General Liability insurance covers common business risks such as customer injuries, customer property damage, and advertising injuries (libel, slander, copyright infringement). If your nonprofit holds fundraisers or other special events, you will need General Liability coverage to book a venue or fulfill a contract. You can bundle General Liability and Commercial Property together in a Commercial Package or as a Business Owner’s Policy (BOP) for a more cost-effective option than having separate policies for both types of coverage. Commercial Property insurance is important to have to help replace and cover costs for any property or products you store that are damaged, destroyed, or stolen, such as all the food for your food drive donation.
Other Types of Policies You Should Consider:
- Professional Liability: Also known as Errors and Omissions (E&O) insurance, this coverage helps cover you in case your professional advice leads to a lawsuit.
- Directors and Officers Liability: D&O insurance covers directors, officers, and board members from liability if a lawsuit is brought against the nonprofit organization, such as accusations of fraud, misconduct, malpractice, or financial mismanagement.
- Employment Practices Liability: If an employee sues your company due to claims of harassment, discrimination, wrongful termination, or other employment-related issues, this coverage will help cover legal defense costs, including a settlement.
- Volunteer Accident coverage: If your nonprofit frequently works with volunteers, it would be beneficial to add this coverage to your policy for further protection. It can help cover more minor medical expenses if a volunteer is injured on site.
- Cyber Liability: Also referred to as Data Breach coverage, this will help your organization if handling private consumer information or data. This policy will provide coverages for incidents such as if data is lost or stolen, if employees make an error and leak information, and if your computer systems are hacked or infected with malware.
- Equipment Breakdown Coverage: This kind of coverage is beneficial for nonprofit organizations that are based in an office or building location. Equipment Breakdown coverage will help cover replacement and/or repair costs if your furnace, boiler, A/C, or other equipment breaks down.
- Commercial Auto: If your nonprofit organization works frequently with volunteers and you have a van for shuttling people to events, your shelter, or community center – whatever it may be – make sure you get Commercial Auto insurance to protect your vehicles, passengers, drivers, and other motorists.
- Workers’ Compensation: If you hire 3 or more employees to work for your nonprofit, Workers’ Compensation insurance is required to have as it provides coverage in case an employee gets injured, to help with medical expenses and lost wages. Volunteers and volunteer executive officers, directors or committee members are not considered to be “employees” under the NC Workers’ Compensation Act, unless they receive remuneration for their services.
Call a local agent to discuss what types of insurance policies you will need for your unique nonprofit.