A crucial part of a non-profit’s overall risk management strategy is insurance. The right non-profit insurance coverage can help your organization stay afloat in times of uncertainty by protecting employees and volunteers and safeguarding facilities, programs, and financial resources. The task at hand is finding the perfect balance of not overpaying for coverage while securing adequate protection.
Evaluate The Basics
One type of insurance that’s almost always necessary is a general liability policy for accidents and injuries that occur on a non-profit’s property involving clients, volunteers, suppliers, visitors, and anyone other than employees. Also, your state likely mandates unemployment insurance and workers’ compensation coverage.
Property insurance that covers theft and damage to your buildings, furniture, fixtures, supplies, and other physical assets is essential, too. When buying a property insurance policy, make sure it covers the replacement cost of assets, rather than their current market value (which is likely much lower).
Consider Other Types Of Coverage
Depending on your non-profit’s operations and assets, you may want to consider optional insurance protection, including automobile, product liability, fraud/employee dishonesty, business interruption, umbrella coverage, and directors and officers liability insurance.
It’s also important to look at cyber insurance. It can protect your organization from the financial impact of data breaches, ransomware attacks, and other cybersecurity incidents. It typically covers costs such as breach response, legal expenses, notification requirements, and lost income from system downtime.
If you conduct special events, also consider insurance that covers associated risks. Before purchasing a separate policy, however, check whether your non-profit’s general liability coverage extends to special events.
Prioritize Significant Exposures
Because you’re likely working with a limited budget, focus on the risks that pose the greatest threats. Then discuss with your financial and insurance advisors the types — and amounts — of coverage that will mitigate those risks.
Don’t assume insurance alone will address your non-profit’s exposure. You should also take steps to help reduce the likelihood that you’ll ever need to file an insurance claim. For example, put in place internal controls and other risk-avoidance policies, such as employee orientations and ongoing training.
Right-Size Your Protection
Your non-profit’s insurance coverage should reflect its specific activities, assets, and obligations — not follow a one-size-fits-all checklist. Regularly reviewing coverage can help ensure your organization is protected against evolving risks while avoiding unnecessary costs. Contact us to evaluate your insurance needs and strengthen your risk-management strategy.
