There are more than 1.5 million registered nonprofits in the United States. Every organization works to serve their communities in different ways.
If you’re running one of them, you know that there’s more to running a nonprofit than offering great services. You still have to treat it like a business.
No matter what industry your nonprofit works in, you know that protecting your organization is the best way to keep it running for years to come. Choosing the right types of nonprofit insurance is the best way to protect your organization.
Here are a few of the most important coverage types to buy for your growing nonprofit.
General Liability Insurance
No matter what type of nonprofit organization you run, you’ll want to invest in general liability insurance. This coverage protects your organization from liability anytime something happens on your property.
For example, if a visitor gets injured while visiting your building, you may be liable for the cost of their medical treatment. If a tree falls on someone’s parked car, you could be liable for the cost of the repairs.
Though preventative maintenance can help reduce your risk, it’s not always enough. You’ll need general liability insurance to be fully protected.
General liability coverage helps cover those unexpected costs should anything happen. Even better, the policy helps cover legal fees should the injured party sue your organization for damages.
Commercial Auto Insurance
Most nonprofits have at least one or two vehicles for staff members to use in the course of their duties. These vehicles make it easy to transport equipment to events or to pick up supplies that your nonprofit needs.
While it might seem like you’re able to use a personal auto insurance policy anytime you get behind the wheel, it’s never a good idea. You need commercial auto insurance as part of your nonprofit organization’s insurance package.
If you get into an accident while working, your personal auto insurance provider may refuse to cover the damage. If this happens, you’ll have to pay the full cost of the damage out of pocket. Worse, your insurance provider can cancel your coverage permanently.
Commercial auto insurance covers anyone driving the nonprofit’s vehicles. You’ll be able to file a claim without issue.
Workers Compensation Insurance
Unfortunately, workplace injuries can happen anytime without warning. When they do, your employees will need medical treatment so they can recover as soon as possible.
With workers’ compensation insurance for non profits, you’ll protect your employees easily. The coverage pays for their medical treatments and can give them a portion of their regular pay while they recover.
Even better, it protects you from lawsuits should employees try to sue you for damages.
Keep in mind that the insurance only covers injuries that occur as a result of job-related duties.
Cyber Liability Insurance
It’s normal for nonprofit organizations to store sensitive information. This could include physical addresses, email addresses, credit card information, and phone numbers for donors and supporters.
Every business that keeps sensitive data on hand is vulnerable to cyber theft and hacking.
When hackers access your databases, they’re able to steal all that sensitive information and use it however they see fit. Cyber liability insurance protects your organization from lawsuits resulting from that lost data.
If a hacker steals sensitive information, your donors may decide to sue your organization. The insurance coverage helps protect you from those legal fees and can reduce the amount you’ll have to pay out of pocket to settle the case.
Professional Liability Insurance
No matter what type of nonprofit you run, you want people to view your organization as highly professional. This is why you hire the best directors and senior staff that you can. However, there’s no guarantee that your team will act professionally in every instance.
If someone sues the nonprofit for unprofessional behavior, your general liability policy won’t be enough.
Professional liability insurance will help cover the cost of your legal fees and settlement amounts associated with the lawsuit. Without this type of insurance for nonprofits, you’ll have to pay the full cost out of pocket.
For most nonprofits, covering those legal fees will put undue strain on their operating budgets. This makes serving the community almost impossible.
Unless you run your nonprofit entirely online, you’ll need property insurance as soon as you open your doors. This coverage protects your building from damage and offsets the cost of repairs due to unexpected events.
Standard property insurance policies cover both the exterior of the building and the interior. The policy will cover everything you store inside the building including the furniture and office supplies you have on-hand.
Just make sure the policy is large enough to pay for any repairs or full replacements should you need to file a claim. If the damage you suffer costs more than your policy’s coverage limit, you’ll have to pay the rest out of pocket.
Unfortunately, even the most comprehensive liability coverage may not be enough. That’s where umbrella insurance comes into play.
Umbrella insurance is a supplemental policy that increases the amount of liability coverage you’ll have in place. If you’re sued and the damages cost more than your general liability policy can cover, you’ll be okay. The umbrella policy will cover the remaining amount so you can keep your savings intact.
Invest in These Types of Nonprofit Insurance
Running a nonprofit is a great way to serve the community. However, you still need to protect your organization from every possible threat.
These nonprofit insurance types are a great place to start when choosing the best coverage for your organization.
Since every organization is unique, it’s best to speak to your insurance agent before you buy coverage. They’ll be able to go over the risks your organization faces and help you find the exact insurance that will protect your organization.
Looking for more tips to help you streamline your nonprofit’s operations? Check out our latest posts.