Non-Profit Insurance in Rocklin CA & Sacramento CA
All modern businesses require some form of insurance related to their specialized industry, and non-profit businesses are not different. Just because your company isn't focused on making profits does not mean it doesn’t require business insurance. In fact, non-profit companies can face unique risks. As noted by Risk Management, many nonprofits lack Directors and Officers Liability Insurance, which helps protect board members from personal liability if a lawsuit is brought against the non-profit.
Board members aren't the only ones at risk. If your non-profit's funds are drained, it can be hard to continue your normal operations until you can acquire more funding. Donors may be hesitant to continue supporting any non-profit that's fallen into legal or financial trouble.
Non-Profit Insurance Features
Common choices for non-profit insurance coverage include:
- Property Insurance: Whether a non-profit owns or leases the property it uses, the property itself often plays a vital role in the non-profit’s operation. Damaged or destroyed property could prove catastrophic for a non-profit’s operations.
- Fidelity Insurance: Unfortunately, some employees take advantage of their position and embezzle funds. This part of non-profit insurance provides coverage in the event of such losses.
- Commercial Auto Insurance: For non-profits that rely on vehicles to transport goods or employees, ask about commercial auto insurance coverage, freight, and/or cargo insurance for businesses that transport high volumes of goods.
- Accident Insurance: Many non-profits work closely helping people in their communities. Unfortunately, both employees and customers can be vulnerable to falls and other injuries. It's important to have coverage in the event that they're hurt.
This list is not exhaustive. Just like for-profit businesses, non-profits can engage in many different types of work. There is no single policy that's capable of covering every area of concern. Before buying any kind of non-profit insurance, talk to a Brown & Brown Insurance Brokers of Sacramento, Inc. agent about what your organization does, where it operates, and what sort of risks you might be exposed to. We'll work with you to find the best possible plan for your needs and your budget.
Requirements for Non-Profits
Before you're offered coverage, you may be asked to provide some of your records. This may include a list of any legal claims your organization has faced in the past and any hazardous behaviors the company engages in (no matter how charitable those behaviors are). This helps with our risk-assessment process and ensures that the policies we offer are enough to protect your organization in the event that one or more of them is needed.
1. Trefry, John. "Nonprofit Management Faces Liability Risks." Risk Management. September 1, 2014. Accessed April 14, 2016. http://www.rmmagazine.com/2014/09/01/nonprofit-management-faces-liability-risks/.
Here are four key types of non-profit insurance you should consider.
1. Directors & Officers (D&O)
Directors are held to a high standard and have legal responsibilities including:
- Duty of Care - requires D&Os to act prudently and reasonably in regard to the management of the organization’s affairs
- Duty of Loyalty - prohibits D&Os from using their position in the organization to further their own personal interest
- Duty of Obedience - requires D&Os to ensure that the organization is run in accordance with its charter and bylaws, and that the organization complies with applicable laws
The personal assests of individual board members are at stake in lawsuits.
2. Commercial Liability
Commercial Policies for Nonprofits should include multiple coverages designed to meet the needs of the organization. There is no one size fits all for liability protection. Coverage should be built based on the risk exposures of the nonprofit.
Sample exposures include;
- General Liability
- Abuse and Molestation
- Medical payments for volunteers
- Fundrasing event liability
- Business Income and Extra Expense
- Commercial Auto
- Tenants Legal Liability
- Cyber, etc.
3. Professional Liability
Many nonprofits erroneously assume that their D&O policy covers "errors and ommisions" (Professional Liability). D&O insurance is designed to protect personnel from claims that arise due to actions they have taken within the scope of their duties as officers, directors, or company individuals.
Professional Liability insurance, on the other hand applies to errors and omissions while performing the service that is part of your organization. In a world where lawsuits are common, damages may run up to hundreds of thousands of dollars.
According to Pamela Davis, President and CEO of the Nonprofits Insurance Alliance Group and a passionate advocate for nonprofits and their insurance needs, 90% of claims are due to “accidents and injuries related to automobiles or slips, trips and falls at nonprofit locations and special events.” However, these 90% of claims result in only 65% of the dollars paid out. The 10% of claims resulting from allegations of improper employment practices, professional errors and omissions, and sexual abuse account for 35% of claims dollars paid. Davis goes to explain why nonprofit organizations are especially at risk: “we work so intensively with clients and provide services to some of the most vulnerable and the most troubled in our communities.”
4. Employment Practice Liability (EPLI)
EPLI lawsuits are among the most common liability lawsuits. EPLI insurance covers wrongful acts in relation to employment, such as wrongful termination, discrimination, sexual harassment, etc.