A comprehensive insurance policy is taken for granted until something happens where it is needed. This is true for individuals, traditional businesses, and nonprofit organizations. There are several different types of nonprofit insurance coverage, all of which play an important role in guarding the business against an unexpected event that could imperil the group’s future.
General Liability Insurance
General liability insurance for nonprofits protects an organization against accidents occurring to a visitor or client while on the nonprofit’s property. The insurance company will cover any damages a court may order the group to pay a victim but does not apply to the group’s employees, who are covered under worker’s compensation insurance.
Whether owning or renting an office or building, nonprofits need to be insured against loss of property and equipment in the event of a fire, natural disaster or other event. If the organization owns the building, the coverage should include it as well as office furniture, computers and other office equipment, inventory and supplies.
The amount of property damage coverage should consist of the amount needed to replace items, not their market value at the time of the incident. This type of coverage is also known as equipment insurance.
If flood liability insurance is needed, nonprofits may need to purchased it separately from their property liability insurance policy.
Another type of nonprofit insurance coverage is auto insurance for employees. If the group’s workers or volunteers use their vehicles or company vehicles for company business, a minimum amount of liability coverage is required. This coverage pays for damages a driver causes to property or other people while conducting the organization’s business.
Directors and Officers Insurance
D&O insurance covers the organization’s directors and any officers that could be named in a lawsuit. Most of the time, these lawsuits are for fraud or mismanagement of funds. However, there are certain kinds of claims not covered by this policy, such as criminal behavior or disputes between individual directors.
Professional Liability Insurance
Similar to medical malpractice insurance, this coverage falls in line with directors and officers insurance. It protects not only against organizational mismanagement but also against such workplace-related issues as sexual harassment and discrimination. Any member of a nonprofit organization could be covered under these policies. Coverages can protect staff, volunteers, directors and officers are covered under this insurance.
Worker’s Compensation Insurance
This liability coverage protects the nonprofit organization if an employee or volunteer is injured while on the job or becomes ill as a result of the job. It provides compensation for medical care and replaces lost income for the worker, and may offer financial benefits to surviving members of a worker’s family if death occurred on the job. This liability coverage generally prevents the business from being sued by the employee or their survivors.
What Next for Your Nonprofit Organization?
For more information on the type of insurance policy nonprofits should have as well as individualized insurance plans, connect with an experienced agent Allied Insurance Brokers who can help with a free evaluation. Whether your organization needs a general liability insurance policy or something greater, we can help nonprofits in every step of the way.