Given the tight budgets that most non-profit organizations run on, a single significant or unexpected expenditure might put them out of business. This is why having the correct insurance plan to protect against even the biggest risks is a smart choice.

This blog will list down some of the necessary insurance policies you must have if you’re running a non-profit or know someone who does.

General Liability Insurance

General liability insurance, commonly known as commercial liability insurance, safeguards an organization’s assets. It pays for liabilities incurred if somebody is injured on its premises. A typically covered incident involves a guest or customer falling due to a spillage or trash. The general liability insurance coverage also covers an organization’s assets and liabilities for damages to property to a third-party committed by the organization or its workers. The expense of legal defense, as well as any award or settlement, is covered by general liability insurance.

Non-profit organizations can get general liability insurance to prevent themselves from being held liable as tenants if they cause any damage to the rental home caused by fire, water, or any other insured loss. Finally, allegations of incorrect or misleading promotion, such as copyright infringement, slander, and defamation, can be covered by general liability insurance.

Property Insurance

Non-profits, like any other businesses, might risk any part or all of their assets in the event of an earthquake, fire, hurricane, or other incidents like vandalism, theft, and other significant loss of property. Whether the organization owns or rents the property it uses, the situation will be the same. In case of a catastrophe, property insurance can protect the assets of these organizations, like their equipment, machines, furniture, fixtures, flooring, computer accessories, and other inventory.

While the most basic insurance plans will include such things, a non-profit organization should contact its insurance firm ahead of any incident to double-check. They must also clarify that, instead of providing a market valuation for a used asset leading up to the loss, its insurance would fully cover the replacement cost of the damage or loss of property.

Auto Insurance

If any volunteer or employee uses cars or any other vehicle to conduct the organization’s operations, whether the car belongs to an employee or employer, the non-profit organization must acquire auto liability insurance.

Non-profit auto insurance transfers the risk of serious injury caused by a driver to other individuals or property when conducting the organization’s activities.  It’s worth noting that the area in which the non-profit is registered may need a certain level of insurance. Check to see if supplementary auto insurance, such as personal injury protection (PIP) and uninsured/underinsured motorist (UM/UIM) coverage, is required by state law.

Product Liability Insurance

Although it’s not usual for non-profits to make and/or sell a product, they might do it on certain occasions to collect revenue from donations. Girl Scout cookies, such as the popular thin mints, peanut butter, and shortbread cookies, are perhaps among the most well-known fundraiser examples. Customers who allege they are harmed by a dangerous or faulty item sold in fundraising events will be covered by product liability insurance. Choking dangers, fractured teeth, and allergic responses are just a few of the potentially life-threatening insurable incidents.

Directors and Officers Insurance

Risks involving operations and acts conducted by the management board or officers are transferred to insurance through directors and officers (D&O) liability coverage. In case an employee, customer, supplier, beneficiary, or any other person or group files a lawsuit against the organization, together with officers and directors, for any sort of lawbreaking, control, or loyalty violations, D&O coverage protects these people and the organization. Whereas a business, by definition, provides officials like directors and other top management positions with some level of personal liability protection, many non-profit organizations choose to provide further protection to important members, like officials on the executive team.

Professional Liability Insurance

When any organization, be it for-profit or non-profit, or individual fails to adequately fulfill their professional responsibilities, a professional liability insurance coverage, also known as malpractice and errors and omissions insurance, is activated. These include healthcare experts, lawyers, legal assistants, therapists, and counselors in the non-profit sector. Because these experts are supposed to have extensive technical expertise, training, and knowledge in their respective fields, they are required to deliver the services and appropriate results, primarily for which they were hired in accordance with the professional codes of conduct. A business services individual or non-profit organization could be found liable for damage done to some other organization or entity if they choose to or are unable to employ the competence level that a customer should reasonably require.

If either of the below-mentioned conditions applies to a non-profit organization, it should acquire professional liability insurance:

• The non-profit organization offers a service or portrays its activities in a professional way.

• On a regular basis, the non-profit provides guidance and advice to clients.

• As a condition of signing contracts, the non-profit organization must obtain professional liability insurance.

Is Insurance Necessary if You’re Running a Non-Profit from Home?

Don’t get in trouble because of your noble deeds. Many homes or rental insurance plans exclude business-related damages from coverage. Other policies prohibit you from conducting business from your home. If your insurer discovers that you operate a non-profit from your house, your coverage might be restricted or canceled. Prevent an insurable incident by informing your trustworthy insurance firm that you are operating a non-profit organization from your residence and obtaining the right kind of insurance.

If you’re looking for a top firm providing the best insurance policies for non-profit organizations, consider Integrity Now Insurance. The company provides personalized insurance policies for non-profits organizations and churches in multiple states, including Arizona, Ohio, Washington, California, and Nevada. We specialize in a whole suite of insurance services, including but not limited to, general liability insurance, business auto insurance, workers compensation insurance, directors and officers insurance, abuse and molestation insurance, and more for nonprofits and faith-based organizations. Contact us now for further information.

About the Author

Neil McDonald is an insurance agent by profession. He’s been working in this industry for over 15 years. Neil has been associated with Integrity Now Insurance for four years and strives to provide the best insurance plans for non-profits organizations and churches.