Non-Profit Liability Insurance: Does Your Organization Need It?

Non-Profit Liability Insurance is not a term used insurance, but it’s commonly searched when non-profits are searching for insurance. For this article, we discuss what non-profit insurance is.  

The non-profit sector is thriving, with over 1.6 million registered non-profits in the U.S. today. Like any business, non-profits can face lawsuits from donors, volunteers, employees, and government regulators.

Non-profits are often targets for litigation. They are ripe for data breaches and cyber attacks as well. Businesses that work with the public are always at risk. And non-profit liability insurance is a must.

If you run a non-profit, you must protect it. Here’s a look at how liability insurance can benefit your organization.

General Liability Insurance

General liability insurance covers common business risks. These include customer property damage, customer injury, and advertising injury.

It protects your business from lawsuits and helps your business qualify for contracts and leases. You may need liability coverage to book venues or fulfill client contracts if you hold benefits or special events.

A bundled policy may be a cheaper option than purchasing each policy separately. Speak to an insurance agent to find out what policies your organization qualifies for.

Commercial Property Insurance

This type of insurance protects properties your organization owns. This includes buildings, equipment, contents, and personal property. Protection covers theft, natural disasters, and perils of fire.

If you run a non-profit out of your home, it’s a good idea to have homeowners’ or renters’ insurance. Speak to an insurance expert to help determine the best way to protect your non-profit.

Business Owners Policy (BOP)

If nothing is unusual about your general liability and property exposures, you may want to purchase a business owner’s policy (BOP). This insurance bundle includes general and commercial liability and business interruption insurance.

This is a popular option for non-profits. It provides adequate coverage for less than purchasing multiple policies separately.

Workers Compensation Insurance

Injuries in the non-profit sector vary depending on the industry you’re in and the operation you run.

Workers’ compensation insurance will cover medical expenses and lost wages if an employee is injured on your business property.

Worker’s comp does not volunteers.

Professional Liability Insurance

This type of insurance is also known as professional indemnity or errors and omissions (E&O) insurance. Professional liability insurance protects your organization from common mistakes, misrepresentation claims, civil lawsuits for negligence, and more.

Directors and Officers Insurance (D&O)

D&O insurance protects your business from defense costs and legal damages from allegations, wrongful acts, and lawsuits against your board of directors or officers. It protects your current and past organization leaders from lawsuits and litigation.

Board members can be subject to personal liabilities, even if they only volunteer their time. Convincing a qualified candidate to sit on your non-profit’s board could depend on whether they will be protected by D&O insurance.

Typical Claims Against Non-Profits

As a non-profit, you face many liabilities that could put your organization at risk. Consult an insurance specialist about the best choices for non-profit organization insurance.

Some common claims against non-profit organizations include:

  • Contractual disputes
  • Personal injuries
  • Dissatisfied donors
  • Employment practices
  • Financial reporting

Non-Profit Liability Insurance

The non-profit business sector is growing every year. These organizations come in all shapes and sizes, and their insurance needs vary.

Without question, your organization needs non-profit insurance. Failing to get the right coverage puts it at risk.

At The Soden Agency, we have the experience and connections within the insurance industry to provide a wide range of insurance options for your non-profit.

Contact The Soden Agency today to discuss your insurance needs.