Insurance is the cornerstone of any non-profit’s comprehensive risk management plan. It cannot protect your organization from every contingency, but it is critical to protecting the people, property, funds, and support you depend on.

Must-have policies

Many kinds of insurance coverage are available, but it is unlikely your organization needs all of them. One type you do need is a general liability policy for accidents and injuries suffered on your property by clients, volunteers, suppliers, visitors, and anyone other than employees. Your state also likely mandates unemployment insurance as well as 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 to be much lower).

Optional coverage

Depending on your non-profit’s operations and assets, consider such optional policies as:

• Automobile
• Product liability
• Fraud/employee dishonesty
• Business interruption
• Umbrella coverage
• Directors’ and officers’ liability

Insurance also is available to cover risks associated with special events. Before purchasing a separate policy, however, check whether your non-profit’s general liability insurance extends to special events.

Setting priorities

Because you are likely to be working with a limited budget, prioritize the risks that pose the greatest threats and discuss with your financial and insurance advisors the kinds and amounts of coverage that will mitigate them. However, do not assume insurance alone will address your non-profit’s exposure. Your objective should be to never actually need insurance benefits. To that end, put in place internal controls and other risk-avoidance policies.

We can help you establish policies that stipulate proper oversight of accounting functions by executives and board members and provide for the security of physical assets and safety of employees and non-employees. Your insurance agent also can help determine the amount of coverage that is appropriate given the size and scope of your organization.