Understanding Nonprofit Insurance

Nonprofit Insurance Program

Understanding Nonprofit Insurance

5 Steps to Understanding Nonprofit Insurance

Insurance for nonprofits is often a difficult maze to navigate for many 501c3 organizations and their directors. The difficulty of understanding insurance can cause many nonprofits to skip the insurance process altogether. There are a few simple steps you can follow when researching insurance for nonprofits that can make the process easier to understand and purchase an insurance policy.

Step 1:

Create an insurance “cheat sheet”. Insurance companies often require the same information to provide an insurance quote for nonprofit insurance. By creating a file that has the most common information requested, you can eliminate multiple phone calls and emails requesting additional information and time involved in finding documents. A few items you may want to secure include:

  • Nonprofit organization contact information
  • Description of all services offered by your nonprofit
  • Nonprofit 501c3 letter
  • Latest nonprofit financial statements
  • Copies of any policies and procedures in place (i.e. volunteer policies & procedures)

Step 2:

Contact an insurance agency that specializes in offering nonprofit insurance. General insurance agents do not always understand the unique needs of nonprofits. By choosing to work with an insurance agency that specializes in nonprofits, you can be assured that the insurance team will understand the difficult times you face in today’s economy and will be willing to work with you to secure affordable insurance that will protect your nonprofit in the event a lawsuit is filed.

Step 3:

Understand the coverages being offered. There are many types of insurance policies available to nonprofits. Make sure you fully understand the benefits to the following:

The easiest way to understand insurance is to ask questions about each type of insurance coverage and ask for a detail sheet that will explain each in more depth.

Step 4:

Bring in a decision team! Schedule a board of directors meeting that includes your insurance agent (by teleconference or in person) to discuss the insurance coverages, costs, and benefits to your nonprofit. Having the board of directors understand the benefits to your nonprofit will be a big benefit and relieve some of the stress in trying to make the right decisions.

Step 5:

Once you have purchased insurance for your nonprofit, keep your insurance agent up-to-date. The world of nonprofits changes daily and it is vital that you notify your insurance agent of any changes in you daily operations. This ensures that you are insured properly and there are no coverage gaps. Your insurance agent should be notified of the following:

  • Has your nonprofit acquired any new vehicles?
  • Do you have any upcoming fundraisers or special events?
  • Have you moved locations?
  • Has your nonprofit mailing address changed?
  • Are you exhibiting at any special events?
  • Have you expanded or decreased the types of services you offer your community?
  • Has your nonprofit purchased any new equipment?

These are just a few items you should notify your insurance agent about. For a more detailed list, contact your insurance agent today.

By following this 5 step guide to nonprofit insurance, your nonprofit should find the insurance maze to be a bit easier to navigate. The team at Nonprofit Insurance Program would be happy to answer any questions or even review your current insurance coverage to help ensure your nonprofit is properly protected against potential lawsuits. Call an insurance counselor today at 800-673-2558.

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