Why Nonprofits Need Insurance

do nonprofits need insurance and charities are not in the business of making a profit, but they are exposed to a wide range of risks just as any other company. Whether the risk is a lawsuit, loss of property or an unexpected expense, any nonprofit or charity can be financially devastated by these types of events. Insurance is a smart way for nonprofits to mitigate these risks and protect themselves.

Just like any other business, every nonprofit is unique and has a different set of risks and needs. To get the best policy for your organization, it’s important to work with an insurance broker or agent that understands your industry and the specialized coverages you need. A good broker will also review your current policies and look for gaps in coverage that should be addressed. They will benchmark your policy costs against other nonprofits of your size and type to make sure you’re paying a fair price for the policies you need.

Insurance is a vital piece of any business, but it’s even more important for nonprofit organizations to have the right kind of protection in place. Because they operate on such tight budgets, a single major claim can have devastating consequences. The key is to be proactive about your insurance and to anticipate the most common risks faced by nonprofits, so you’re prepared for them.

General liability insurance: This basic policy covers bodily injury or property damage that occurs on your nonprofit’s premises and may include slander, libel and copyright infringement. It’s usually a requirement for many funding or hosting events and for most rental properties and contracts. It’s also a good idea to cover your volunteer activities with separate volunteer accident insurance.

Directors and officers (D&O) insurance: This policy keeps your nonprofit’s board members protected from claims of mismanagement, including wrongful termination, discrimination and sexual harassment. This type of insurance typically covers the cost of legal representation as well as the plaintiff’s damages.

Cyber liability insurance: Nonprofits retain confidential client and donor information just as any other business, which makes them vulnerable to data breaches and other cybersecurity threats. A cyber liability policy will help cover costs related to system and data loss, business interruption and regulatory interruption expenses.

Automobile liability insurance: Whether your nonprofit owns its own vehicles or relies on donated ones, it’s important to have the right auto liability coverage in place. This policy should cover uninsured and underinsured motorist coverage as well as commercial auto physical damage, medical payments and workers’ compensation.

Other common policy additions for nonprofits include professional liability, employment practices liability and crime/fidelity coverage. Having the right policies in place can help you meet your funding and event goals, while protecting the reputation of your nonprofit organization. If you’re looking for the right insurance to protect your nonprofit, contact CTG Insurance. Our agents will be happy to review your coverage and find the best options for your organization. We offer competitive rates and comprehensive insurance solutions to fit any budget.






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