Nonprofit Insurance Program

Five Pieces of Advice for Nonprofit Start-Ups

By Alexa Connelly
May 22, 2013

When preparing your nonprofit business plan, most forget a very important expense, insurance.  You say, this is not a business, it’s a nonprofit.  It is still a business and the rest of the world will view it as such.  You wonder why the nonprofit needs insurance.  Well, does your non profit have clients come into the office?  Does your non profit have a program for young adults or the disabled?  What about a repairman working on your property? In any of these instances, the nonprofit is liable while they are on the non profits establishment, so some type of insurance is needed.

Types of insurance

The type of insurance will be determined by the functions and operations of the nonprofit.  Will your non profit have a car?  Will your nonprofit look for grants in the future?  Will your non profit have paid employees and/or volunteers?  If you responded yes to any of those questions, then you need to include the cost of insurance in your nonprofit business plan.  If the plan for your non profit is to seek grants, many of the government grants require a minimum of $1 million of insurance.   Determine the type of insurance you will need and include this as part of the nonprofit business plan.

Estimate the cost

Now that you are aware of your liability needs, one policy may not cover all aspects of your liabilities. It will be more economical to purchase an insurance package, than trying to get individual policy per liability.  On an average, premiums will be from $150 – $300, all based on the needs of the nonprofit.  Remember to have the premium explained to you and inquiry on possibilities of improving the terms for an affordable premium.

Who to talk to about insurance?

You will encounter two types of agents, independent and captive. An independent agent is one who will sell insurance for several companies.  The captive agent will represent a single insurance company.  You may have to make a couple of calls to find a company that will work with a small organization.  Begin your search by asking for information for a business owner’s insurance policy, and then continue by providing your needs for your nonprofit organization.

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