Nonprofit organizations operate with purpose, but they face many of the same risks as for-profit companies. Passion won’t eliminate risk and even organizations doing good work face wide-ranging real-world liabilities. It’s easy to think, “We’re a nonprofit–we don’t need much insurance,” when the reality is that even one claim can threaten your mission and funding.
At Althans Insurance, we work with nonprofits to align coverage with their cause. Here’s what every nonprofit organization needs to know to stay protected and equipped to keep making a difference.
Nonprofits And Risk
Your nonprofit’s mission, while noble and worthy, doesn’t protect your organization in the face of risk. Only a solid insurance policy can do that. Just what sorts of risks could you be up against? The list truly runs the gamut, but here are some common examples:
- Mismanagement of funds
- Self-Dealing / Conflicts of interest
- Outdated bylaws
- Tax-exempt status risks
- Wrongful termination and/or discrimination
- Wage and hour violations
- Special events mishaps, injuries or third-party property damage
- Volunteer accidents
- Auto accidents
- Donor data breaches
- Impersonation / phishing fraud
- Insider threats
- Failure to deliver services
- Damage to buildings, equipment, or supplies
- Theft or vandalism
These are just a smattering of some of the many ways that nonprofits could find themselves in legal trouble or bearing a heavy load of liability or loss. Organizations that are already operating on tight margins could be staring down costly lawsuits, claims of property damage, and messy employee or volunteer issues that drain reserves and threaten the mission. And this can happen even when the offenses are accidents or negligence is unknown–you or your staff may still find yourselves on the wrong end of a regulation or dispute.
Nonprofits can use insurance to mitigate these risks with a range of policies that could include:
- General Liability Insurance: covers third-party injuries or property damage at events or on premises
- Employment Practices Liability Insurance (EPLI): protects organizations against lawsuits from employees for HR-related claims
- Directors & Officers (D&O) Insurance: protects board members and leaders from personal liability for decisions made on behalf of the organization
- Volunteer Accident Coverage: ensures volunteers are protected if injured while helping
- Property Coverage: safeguards offices, equipment, and supplies from theft or damage
- Cyber Liability Insurance: protects donor data and electronic records from breach or theft
Clearly, nonprofits are facing threats from all sides, just like any other organization. You could argue that the risk is even greater when volunteers and public events are involved. Basic coverage that doesn’t offer robust and comprehensive liability protection simply isn’t enough. Many nonprofits are underinsured, and one-size-fits-all policies don’t work because risks vary. But you and your organization don’t have to be at the mercy of life’s what-ifs. Althans helps nonprofits protect their people, programs, and purpose, so they can focus on making a difference.
How to Choose the Right Coverage for Your Nonprofit
Many nonprofit organizations assume that they don’t need insurance coverage, or they may carry a very basic policy that doesn’t take their full range of risks into account. Assessing organizational risks with a realistic eye is the best way to evaluate current coverage and see if gaps are leaving you unprotected. For instance, you can review operations and activities and imagine what could go wrong. Then ask your trusted insurance agent if you are currently protected in those situations. It’s also important to ensure that the agent you are trusting to safeguard your organization has extensive experience working with nonprofits–they need to innately understand the unique risks you face in order to help you protect against them. This includes regular policy reviews to ensure that protection grows right along with your organization.
When you work with an experienced insurance team, they will be able to anticipate risks that you may not have considered otherwise. You will also benefit from tailored coverage recommendations that are targeted to your unique risks, ensuring that, come what may, you can still carry on in your mission and purpose. The time to seek out nonprofit-specific insurance along with ongoing support and policy reviews is now, well before a good idea becomes an urgent need. Contact our team today to learn more.
Rely On Althans Insurance Agency
Nonprofits do important work but still face real risks. The right nonprofit insurance protects people, assets, and the mission itself. Althans Insurance is proud to work with childcare centers, group homes, foundations, counseling centers, school districts, and more, providing them with insurance products that allow them to focus on their mission to serve. Volunteerism and philanthropic endeavors are at the heart of what we believe in, and so we feel it is especially important to equip nonprofits with the protections they need to keep on helping their communities.
Now is not the time to risk what you’ve built–it’s time to invest in your ongoing growth and success. At Althans, we believe that insurance is an investment in protection that’s provided when you need it most. Contact us today to learn more and get started on a path to a more secure future for your nonprofit.