Nonprofits: Do You Have the Right Coverage?
If you’ve ever worked for a nonprofit, you know how limited budgets can be. It just takes one major unexpected expense -- such as a lawsuit -- to lead to an organization’s downfall. That’s why it is critical for nonprofits to safeguard their organizations against various risks with the right insurance coverage.
We’ve had the pleasure of working with leading nonprofit organizations across different sectors including, Vocational & Sheltered Workshops, School Districts and Labor Unions, among others, and these are the most common and important types of coverage we would recommend.
Workers’ Compensation
As with most businesses, we recommend workers’ compensation coverage for nonprofit organizations, too. While General Liability Coverage can include some aspects of employee-related risks, workers’ compensation provides your employees with more robust benefits in the event of a work-related injury or illness. Read more about this type of insurance in our recent blog post here.
Directors and Officers Insurance
Also known as D&O insurance, this type of coverage helps protect a nonprofit’s board of directors and officers (including those who volunteer for these roles) if they are named in lawsuits associated with wrongful act allegations (e.g., fraud or financial mismanagement) and/or lawsuits against an organization’s board of directors and/or officers. This is a particularly important type of coverage for those organizations seeking funding.
There are some claims that are not covered by a D&O policy, such as damages arising from fraudulent or criminal behavior. The Concannon Insurance Agency is here to help advise on the ins-and-outs of these policies.
Errors & Omissions (E&O) Coverage
This coverage -- also known as Professional Liability Insurance -- typically covers
negligence, personal injury, copyright infringement and can include coverage for
damages caused by things your employees did, or should have done. It can help cover your settlements or court costs, which otherwise would be very expensive for your nonprofit to cover directly.
We especially recommend this to nonprofits that provide professional services, advice to
clients or a contractual service to its clients.
Cyber Liability
This coverage helps protect your organization against the cost of broad, technological-related security breaches, including risks incurred when a company’s computer or mobile device with sensitive data has been stolen; when electronics have been improperly disposed of; when a network or computer has been hacked; and with the negligent release of sensitive information. With more employees working remotely these days, this is an important type of coverage to obtain.
General Liability Coverage
As the name suggests, this liability policy covers general damage scenarios, such as property damage or accidents that happen on a nonprofit’s property. With this, your organization will be covered for accidents or damages that the organization is ordered to pay someone (for instance, if a supplier falls on your property).
This coverage can also protect your organization’s assets if it is sued for personal injury, negligence, slander, and more.
Property Coverage
Whether your organization owns or rents your workplace, it’s important to think through what the nonprofit may lose in the event of a natural disaster or through an act of vandalism.
This coverage protects the property as well as equipment, furniture, computers, inventory and more, and can be customized to fit the unique needs of your nonprofit. When you seek this type of coverage, be sure that your policy covers the cost to replace the property (versus paying market value of the used good immediately prior to the damage).
If you are running a nonprofit out of your home, you may need to make adjustments to your homeowners’ or renters’ insurance policy since those may not cover business-related claims.
Your agent or broker can explain more about your deductible and what will and will not be covered under this policy.
Group Employee Benefits (Health, Life, Vision, Dental, Auto)
Employee benefits -- including health, life, vision, dental and auto coverage -- are types of coverage we also recommend to nonprofits. We can help with creating group employee benefit packages and tailoring them to your employees’ needs.
Employment Practices Liability
This policy will help your nonprofit when an employee sues over employment-related issues, such as discrimination, harassment or other violations of civil rights that prevented them from completing their work.
In summary, there are many considerations for a nonprofit organization to take to ensure its mission, budget, employees, board of directors and property are covered against costly mishaps. Our team at The Concannon Insurance Agency would love to talk through different scenarios and what types of insurance coverage would make the most sense for your organization. Contact us today to learn more.
