I’m working with a small Dallas area non-profit organization on their insurance. They work with kids on a variety of issues pre-teens and teens face; family, school, bullying, and the difficult transitions many of us faced from elementary to middle school, and then again moving on up into high school. I’ve thoroughly enjoyed learning about what they do and then helping the organization find the right insurance to protect it.
Non-profits have the same insurance needs as many small and medium sized businesses. In fact, many non-profit organizations face higher risk factors than a lot of businesses, depending on the population or community they serve. I work with several non-profits, and as I complete preparing the options for this new one, I felt it to be the right time to address the insurance needs of non-profits.
General Liability: Most non-profit organizations need some level of general liability insurance. This coverage ultimately should protect them in the event they are sued by a member, participant, or some other person or entity for negligence. Ideally this coverage should protect them based on what they do, and the service they provide whether it be scholarships, fund raising for a medical cure, teaching, workshops, etc.
This is not the case, however, in all general liability policies. Some will only cover the organization’s office, or premises, which is why it’s referred to as premises liability. In a case like this, the liability coverage is primarily for someone who’s hurt in the organization’s office and may actually exclude what they do.
If the organization works with minors, it is imperative the general liability policy includes coverage for sexual abuse and molestation. Organizations needing this coverage include youth sports leagues, camps (especially overnight), teen workshops, etc. If this coverage is not included, or can’t be added, find a company that provides it.
Errors and Omissions: For organizations providing a service including teaching, workshops, some level of counseling or life skills, errors and omissions, or E&O, coverage is a requirement. This is the same type of services oriented professional liability needed by consultants, programmers, graphic artists, insurance agents, etc.
It’s designed to cover a negligence claim for giving bad advice, counsel, or making a mistake in the process of providing the organization’s service. In these types of non-profits, E&O covers many things the general liability coverage may not cover, or explicitly exclude.
Business Property: Every organization, whether non-profit or for profit, has some level of business property that needs coverage. This may include office furniture, supplies, marketing materials, computer systems, or even sheet music, stands, and props used by a local orchestra, band, or theater company. In many cases, these may be combined with the general liability coverage in an insurance policy that “packages” the coverage together.
Employment Practices Liability: Some non-profits may have permanent employees. In these cases, employment practices liability, or ELP insurance, covers the organization if it’s sued for sexual harassment, wrongful termination, discrimination, and retaliation. ELP also usually covers inappropriate workplace conduct such as failure to promote, invasion of privacy, defamation, and negligent evaluation. This coverage is usually included with the general liability coverage.
Hired and Non-Owned Auto: All non-profit organizations run on an army of volunteers. This coverage provides protection if any of the volunteers are hurt using their car or a rented vehicle in the course of doing something for the organization, such as setting up a camp, picking up supplies, or other organizational business. It may or may not cover damage to the vehicle, but does provide bodily injury coverage.
Directors and Officers: If the non-profit organization has a board of directors, directors and officers, or D&O, coverage protects members of the board if they are named in a lawsuit for a wrongful act or board decision. This covers defense costs and negligent acts committed by a board of directors or member of the board.
I have volunteered in many non-profit organizations as an adult and parent. I’ve also had the pleasure of serving in leadership positions with several organizations. The work they do is life changing for the participants and the volunteers. Seeing them properly protected with affordable coverage is a passion of mine. Find one to get involved with!
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