How do we reduce our risks? What kinds of insurance do we need?
Doing good work in the community is not enough protection against possible risks. Like other small businesses, nonprofits need to have proper insurance coverage. An independent insurance agent with experience in policies for nonprofits can help. Remember, these agents only get paid based on commission on policies sold, so there is no cost associated with shopping around. Ask colleagues in the nonprofit world for recommendations or inquire with your attorney.
A qualified agent or attorney will also be in a position to help you establish a sound risk management program, including identification of loss exposure, measures to reduce loss, and insurance best suited to your situation.
In many states, insurance tailored to nonprofits is offered through trade organizations or alliances that are themselves 501©(3)s. Such an organization could provide a useful local resource to research and identify your needs and options.
That said, there are several standard policies you’ll likely need. These include General Liability, Auto Liability, Social Service Professional Liability, and Directors & Officers Liability. Depending on your situation, you may also want to consider coverage for volunteers.
Other types of coverage that may be important to your specific organization include:
- Professional malpractice.
- Non-owned or hired auto liability (such as for use of employee or volunteer-owned autos).
- Improper sexual conduct for both the organization and alleged employee or volunteer perpetrator.
- Student/volunteer/participant accident.