Nonprofit Organization Insurance

Buying nonprofit organization insurance can be complicated, especially when the organization is comprised of both paid employees and volunteers. Just because an organization is nonprofit, however, it does not mean that the organization is exempt from needing insurance.

Find the best insurance for your organization.

The type of insurance needed by a nonprofit organization depends on the types of activities with which the organization is involved. A nonprofit art alliance that hosts occasional gallery showings will have different needs than a nonprofit that runs softball tournaments for children. Every nonprofit has some amount of risk involved, whether it is the risk of getting sued by someone who slips and falls in the organization's office or the risk of vehicles used by employees getting involved in a collision.

Nonprofit organizations need to assess their overall risk while also consulting the insurance laws of their local areas. Some states have guidelines regarding the minimum insurance coverage for any business. Some states further require certain insurance guidelines for nonprofit organization insurance.

While there are certain laws that protect people from liability while working in a volunteer status, these laws do not absolve all volunteers from all liability and certainly do not pertain to nonprofit employees who are working within a professional capacity. It is up to the nonprofit organization to assess the risk to both employees and volunteers (and the organization as a whole) in order to ensure the organization is adequately insured to cover potential risk while also meeting all state insurance regulations.

Although insurance needs vary according to the type of activities engaged in by the nonprofit organization, there are some types of coverage that most nonprofits should consider:

• Property: Insurance should adequately cover the cost to repair or replace all property owned and utilized by the nonprofit. This might include office buildings, vehicles, and equipment.
• Liability: The amount of liability insurance needed by a nonprofit organization depends largely on the level of liability involved in the organization's activities. In other words, what are the odds of the organization getting sued?
• Employee Benefits: Nonprofit organizations with paid employees may want to offer insurance benefits such as health insurance, dental insurance, or some other benefit that makes employment with the organization more attractive.
• Volunteer Benefits: Many nonprofit organizations purchase separate accident coverage for volunteers. This is not a health insurance policy, but instead is coverage specifically for volunteers that pays medical costs in the event of an accident while participating in activities for the organization. Typically, these policies are mere augmentations of existing health insurance policies; this means that the volunteer's own health insurance policy would first pay medical costs and then the policy from the nonprofit would cover any additional expenses not covered by the primary insurer.

The type, and amount, of nonprofit organization insurance needed by an organization varies. It is a good idea to consult an insurance professional to assess the needs of the organization instead of just guessing about which policies might be necessary. Look for an insurance professional who has experience with the unique needs of nonprofit organizations. With so many insurance regulations in place, and so many possible situations that would result in an insurance claim, this is not a decision that should be made without first doing some research.

Not all insurance companies offer insurance products for this specialized product. Here is a list of a few of the companies which do have insurance products for nonprofit organizations:

• Alliance of Nonprofits for Insurance
• Philadelphia Insurance Company
• Travelers Insurance Company

This is not an exhaustive list, as there are many companies that offer insurance products for nonprofit organizations. You may want to also consider consulting an insurance broker who will be able to review several appropriate policies available to your organization.

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