How Nonprofit Organizations Can Safeguard Their Operations With Insurance

Nonprofit Organizations

Every type of nonprofit organization needs to be conscientious about its risk exposure related to potential liability and loss. A mission-driven organization with limited resources needs to be able to respond to a problem effectively, so having adequate insurance is a vital safeguard. Here are some important considerations for nonprofit managers about their insurance coverage.

General Liability

A general liability insurance policy is one of the most important types of insurance for nonprofit organizations. This policy is typically the first line of defense in the event that there is a claim against the organization.

Public Liability

Nonprofit organizations that rely on assistance from a volunteer workforce may need to have a public liability policy in addition to a general liability policy. It can offer an added level of protection if a volunteer’s actions give rise to a claim exceeding the scope of the organization’s general liability coverage.

Directors and Officers

A separate policy that covers claims made against an organization’s directors and officers is essential. Board members and corporate officers can face significant personal liability, so organizations need to be prepared to protect them.

Ultimately, a nonprofit organization’s insurance needs will vary based on the nature of its operations and the value of its assets. It is advisable that nonprofits work with an insurance company experienced in serving similar organizations and understands their coverage needs.