What is Nonprofit Insurance?
Non-profits may be committed to pursuing the greater good, but positive sentiments rarely protect an organization when something goes seriously wrong. Just like for-profit businesses, non-profits are also susceptible to property loss, liability lawsuits and other risks. Non-profit insurance helps protect Massachusetts non-profit organizations from many of the risks they face.
Non-profit insurance is a form of commercial insurance that’s uniquely designed for non-profit organizations. Most policies are written as package policies that combine several coverages together, and these coverages can often be adjusted to meet a specific organization’s needs.
What Insurance Coverages Should Non Profit Organizations Have?
The exact insurance coverages that non-profit organizations should carry depend on a particular organization’s mission, operations, assets and other factors. Depending on the specific situation, non-profits might want a combination of the following coverages:
- Non-Profit Liability Insurance, which may protect against certain liability lawsuits
- Directors and Officers Insurance, which may protect organizational leaders form risks related to their leadership roles
- Commercial Property Insurance, which may protect buildings owned by an organization
- Commercial Auto Insurance, which may protect vehicles owned by an organization
- Business Interruption Insurance, which may be appropriate if there are regular expenses to pay (e.g. rent, salaries, etc.)
- Special Events Insurance, which may be appropriate if an organization hosts events (e.g. fundraisers, festivals, parties, etc.)
Does Non Profit Liability Insurance Cover Employee Injuries?
Non-profit liability insurance may cover third-party injuries in some situations, but the protection normally doesn’t extend to employee injuries. Employee injuries and illnesses usually fall under the domain of workers compensation insurance, which non-profits that have employees might be required by Massachusetts law to purchase.
When considering potential injuries that non-profit organizations could be held financially responsible for, special attention must be paid to possible volunteer injuries. In select situations where there’s a long-term relationship between an organization and volunteers, the volunteers might be treated like employees for insurance purposes. Thus, any injuries they sustain while volunteering may be covered by workers compensation coverage. In other situations, volunteer injuries may not be valid workers compensation claims and might fall under another coverage’s (e.g. non-profit liability insurance) protections.
Because how volunteer injuries are treated is a detailed and nuanced manner, non-profit organizations should talk with an insurance agent who specializes in this type of insurance. A specialized agent will be able to explain how particular coverages, such as workers compensation coverage and non-profit liability insurance coverage, might apply in certain situations.
If it’s needed, workers compensation insurance is generally purchased as a separate insurance policy apart from a non-profit package policy.
What Massachusetts Organizations Need Non Profit Policies?The majority of non-profit organizations in Massachusetts could benefit from having a non-profit policy in place. While risk exposure varies from one organization to another, few are completely free of risk and have no need for insurance.
How Much Do Non Profit Policies Cost?
Insurance companies understand that finances are frequently a substantial consideration for non-profit organizations, and many insurers offer affordable non-profit policies. Exact premiums frequently depend on many factors, such as the following:
- What an organization does
- How large an organization is
- Where an organization is located
- What risk-mitigation steps an organization has taken
- What coverages and limits an organization selects
An independent insurance agent can help non-profits find an affordable policy that has the coverages the organization needs and wants. Independent agents are able to compare policies from multiple insurance companies, so they can show non-profits what different insurers will charge for certain protections.