The answer to “Do nonprofits need insurance?” is a complex one. Unlike commercial businesses, nonprofits must consider many unique risks and have strict requirements to remain tax-exempt. Fortunately, there are several different types of insurance policies to help protect nonprofit organizations. In this article, we’ll briefly outline the most common insurance needs for nonprofits, including general liability and directors and officers (D&O) insurance. For more information on these and other specialized insurance options, it’s best to speak with an expert risk advisor.
In general, most nonprofits need the same types of insurance as any other business. However, there are a few important differences. First, you need to find an insurer that has experience working with nonprofits. This is critical to ensure your organization gets the right coverage and isn’t paying for unnecessary costs.
Secondly, the scope of the policy is also important. Nonprofits often have a lot of data that is highly sensitive and valuable. It’s essential that you make sure your policy includes data protection, as well as general business property coverage. This will ensure that if you have a loss, you’re covered.
Another type of coverage that is often necessary for nonprofits is professional liability insurance. This type of insurance typically covers claims such as negligence, copyright infringement, sexual harassment, and other wrongful acts committed by employees or volunteers. Additionally, it may cover legal fees and compensation if a client sues the nonprofit for damages related to its work.
Finally, nonprofits often need auto insurance coverage for rented or non-owned vehicles. This can be a requirement by your state, and it’s crucial to keep in mind that your policy should include coverage for any passengers in those vehicles, as well as any damage to the vehicle or its contents.
Nonprofits are susceptible to the same issues as any other company, including data breaches. It’s important to make sure your insurance coverage includes cyber liability coverage, which will protect against claims made by clients and donors for data breach-related expenses.
Doing your research and finding the right policies can be difficult, but it’s worth it. Your organization can benefit from knowing you have the proper coverage in place, and your employees will likely perform better when they know their concerns are being addressed. To learn more about the various types of insurance that are available for nonprofits, contact us today and we’ll connect you with an expert risk advisor who can assist you in finding the best coverage for your organization. We have over 40 years of experience delivering personalized solutions that are tailored to your unique risks, goals, and budget. Get started with a free consultation.