Non-profits take great pride in being able to offer education, services and support to their local communities. Often times, executive directors are so focused on raising funds and awareness that they often push the topic of insurance policies and insurance language aside to be dealt with another day. However, these actions can lead to serious detriment to the non-profit organization later if decisions are never made on what types of insurance to implement. The best way to make sure you take action today is review the nonprofit insurance coverage options available and determine which is best to protect your non-profit.
General Liability Insurance for Non-profits
Example: In January 2016, a local Pennsylvania College and environmental foundation were sued by a participant for $50,000 for injury caused by a game of tag on their property.
General liability insurance is the most common type of insurance purchased by small businesses and non-profit organizations. General liability insurance protects non-profits against three types of claims including: property damage, bodily injury and personal injury. Property damage coverage provides protection and payment in the event you or a representative of you non-profit breaks another individual’s property. Bodily injury coverage provides payment when a visitor to your organization falls and injures themselves on the property. Personal injury coverage protects you in the event your organization is sued for slander.
Directors and Officers Liability Insurance for Non-profits
Example: In 2011, a nonprofit board of directors was sued by D.C. for $1,000,000 in damages for misuse of over $300,000 in grant money.
Directors and Officers liability insurance is another common insurance purchased by non-profit organizations and protects the board of directors from claims or lawsuits. This is an important insurance policy for your board of directors to review and consider as it protects their personal assets when a claim is made against the board members.Types of claims include misuse of funds or donations, discrimination from another board member and failure to make major operational decisions in a timely manner.
Accident and Health Insurance for Non-profit Volunteers
Example: In 2012, a non-profit volunteer was loading a truck and dropped a fifty pound box on their foot. The volunteer went to the hospital and ended up with $5,000 in medical expenses not covered by her insurance. The non-profit was responsible for these damages.
Accident and health insurance is a great option for non-profits that have volunteers. This type of liability insurance pays any medical expenses not covered by the volunteer’s personal health insurance when an injury occurs as a result of work for the organization.
Special Event Insurance for Non-profit Fundraisers
Example: A Non-profit hosted its annual fundraiser where an attendee had too much to drink and ended the night in an accident injuring another party.The Non-profit was found liable for the crash and injuries because the driver had consumed too much alcohol at their fundraising event.
Special event insurance can be purchased by non-profits to provide protection for fundraisers and special events. Types of claims covered include liquor liability, property damage to the host site, and bodily injury to attendees.Liquor liability provides coverage in the event of a scenario like the above example and protects, pays, and defends the non-profit if they are found responsible for these types of situations. Property damage protects the non-profit in the event there is damage to facility they have rented to conduct the event and bodily injury pays for medical payments resulting from injuries a guest (not a volunteer) may acquire at the event.
Employment Practices Liability Insurance (EPLI)
Example: A small non-profit was recently sued by potential volunteers that claimed they were discriminated against in the volunteer selection process.
Employment practices liability insurance can be purchased as an endorsement on the directors and officers liability policy or as a separate policy. EPLI coverage protects the non-profit from claims arising out of employment practices like discrimination, sexual harassment, unfair hiring practices, wrongful termination, and a hostile work environment. Unlike the name implies this insurance coverage also extends to volunteers who file these types of lawsuits against the nonprofit. The policy pays to defend the non-profit as well as any settlement costs.
These are just a few of the insurance types available to non-profit organizations.Other types of insurance to consider include commercial property, business auto, professional liability, umbrella and sexual abuse and molestation insurance as well as crime and employee dishonesty bonds. Visit our main website for a complete list of Insurance for non-profit options.