Nonprofit organizations serve their communities in a number of ways, whether that’s by providing stable housing, serving meals to those in need or helping in many other vital areas.
These important activities also expose nonprofits to risk. For example, think about all the potential liability associated with managing a public housing property or serving food to people. One mishap can lead to costly insurance claims and possibly lawsuits. That’s why it’s so important for your nonprofit organization to have the proper insurance coverage. This coverage should provide protection when it comes to property, employees and technology.
Property coverage
The key item here is to have strong coverage for any buildings your nonprofit owns and manages. This is particularly true if a large number of people use your spaces day to day, such as the example of the public housing provider. You can work with an insurance advisor to review your existing coverage and identify any gaps.
It’s also a good idea to reduce your exposure to risk through simple upkeep measures. These can include:
Fixing any potholes, cracks or other hazards in your parking lot to prevent accidents and injuries
Ensuring floors throughout your building are clean and dry
Installing slip-resistant mats in doorways
Making sure emergency exits are properly marked and easily accessible
Of course, property doesn’t necessarily end at buildings. Your organization may operate additional equipment or manage a fleet of vehicles. These areas can lead to further risk exposure. Make sure you have documented policies in place for how employees use equipment or vehicles, and talk to an insurance advisor about necessary coverage.
Employee-related coverage
There are two main insurance considerations when it comes to employees. First, you’ll want to be covered if anything happens to them while working. Workers’ compensation insurance is required by law, and it restores lost income and provides medical benefits for workers injured on the job. It also can protect your organization if an employee files a lawsuit due to a work-related injury.
The second key area is protection for your organization and staff related to employee actions. Professional liability insurance offers broad coverage in the event that any of your customers file lawsuits based on alleged mistakes, negligence or misconduct by staff members. Directors and officers (D&O) insurance is similar but is more narrowly focused on board members and other leaders.
On top of protection against potential customer lawsuits, it’s a good idea to be protected against employee actions toward your organization. Even in the most well-run organizations, employee lawsuits happen, and this type of litigation has been on the rise in recent years1. Claims might not always have merit, but the employer must defend itself in all cases. Employment practices liability insurance (EPLI) can help pay for defense costs.
Nonprofit organizations also often have the additional layer of working with volunteers. While employee conduct is more clearly defined in employment contracts, volunteer relationships are typically looser. Organizations should develop clear volunteer guidelines and expectations to minimize their risk, but they should also expect some degree of exposure here. An insurance advisor can help walk you through any additional policy types that may be a good idea.
Cyber coverage
It’s also critical to be protected against the growing number of cyber risks faced by businesses and nonprofits every day. One data breach can shut down your organization and have serious long-term consequences, including reputational damage and possibly lawsuits.
Cybersecurity insurance can be added as a standalone policy or as part of a suite of coverages. Typical offerings include protection against cyberattacks, as well as mitigation in the event that a breach does occur. Once again, it’s a good idea to talk with an insurance advisor about what might be best for your organization.
By taking a holistic look at risk and working with an insurance advisor on the proper coverage, your nonprofit organization can limit potential issues and continue to deliver high-quality service to the community.