How do you know what types of insurance you need for a non-profit organization?
Comprehensive General Liability Insurance is the most common kind of coverage for non-profit organizations, according to Center for Nonprofit Management. This type of insurance protects non-profit organizations from being liable for injury or loss to third parties, including clients, guests, members of the public, and any others that may be affected by the organization’s activities. It covers bodily injury, property damages, personal/advertising injury, and medical payments.
Here are some policy features you might want to consider for a comprehensive General Liability policy for a non-profit organization:
- Coverage for volunteers
- Coverage for claims that occurred during the policy period but were reported after the fact
- Payment of defense costs outside the policy limits
- Cancellation only for cause
Once you have obtained a General Liability policy, you will also want to obtain Property Insurance to cover your organization in the event of damage or destruction to your organization’s personal or real property.
The other types of insurance you will want to consider will be based on the work and activities of your organization. Here are some examples of other insurance coverage that might be necessary for a non-profit organization.
- Directors and Officers’ liability Insurance
- Product Liability Insurance
- Auto Liability Insurance
- Professional Liability Insurance or Professional Malpractice Insurance
- Volunteer/Student/Participant Accident Liability Insurance
If you are running a non-profit out of your home, you should evaluate your renters’ or homeowners’ insurance policy. This is particularly important because some renters’ and/or homeowners’ policies forbid you to use your home for business or will not cover claims that are business-related.
Finally, when obtaining insurance for your non-profit organization, ask your agent about your deductible options and if any types of damage or losses are not covered by your policy. Flood insurance or theft insurance, for example, may need to be purchased separately. But to be sure you have all the coverage you need, it’s best to consult with an agent that is experienced insuring non-profit organizations.
As the Center for Nonprofit Management explains in Nonprofit Answer Book: An Executive Director’s Guide to Frequently Asked Questions, “A good insurance agent with experience insuring nonprofits can work with you to analyze your exposure and even to set up risk management programs.”