Nonprofits may not operate exactly like traditional businesses, but they can be sued like any other business. Having commercial insurance to protect them is a crucial asset to the core of any organization. Individuals gave $258.51 billion to nonprofit organizations in 2014, with over a million nonprofits across the United States, according to the National Center for Charitable Statistics. With that kind of money, you would think every nonprofit would seek coverage. But they don’t.
A lot of people don’t see insurance as a necessity. It’s an extra expense that business owners don’t want to deal with. And sure, you can say that you’re careful and nothing will ever happen to you. But it’s better to be safe than sorry. If you’re not covered and you’re dealt with a lawsuit, it could cripple your nonprofit.
Just because your nonprofit doesn’t operate like a normal business doesn’t mean that you should exclude yourself from dire coverage. Injuries happen. Lawsuits happen. Natural disasters happen. Crime happens. No one can stop life from happening and when you’re dealt with an unsavory deck of cards, you keep playing until you have the better hand.
If you’re wondering why many nonprofits don’t have commercial insurance, we’ll break it down for you. Every nonprofit needs coverage and this is why it’s imperative to run a successful organization.
Size Doesn’t Matter
If your nonprofit is huge, you’ll need coverage. But this fact rings true for all businesses. Many nonprofits believe that because they are small, they won’t need insurance coverage. That’s untrue, says Clements Worldwide. All nonprofits need protection, regardless of their size. There are always exposures that can’t be predicted.
Time happens continuously and there’s no way that we can control everything. But having insurance coverage is something you can control. Don’t try to cut corners because you feel like having insurance isn’t necessary. You’re going to need risk management, whether it seems like it or not.
Coverages to Consider
As far as commercial nonprofit insurance coverage goes, there’s three types you need to consider: property coverage, liability coverage and life/health benefits, according to the Nonprofit Risk Management Center. When purchasing these types of coverage, make sure to consider separate or comprehensive coverage, getting the right insurance carrier and giving the process time to start working. Liability coverages to consider include:
- Commercial General Liability
- Directors’ and Officers’ Liability
- Employment Practices Liability
- Professional Liability
- Sexual Abuse and Molestation
- Automobile Liability
- Cyber Liability
- Umbrella and Excess Coverage (optional, if you think you need more coverage than this)
When looking at property coverages, these are what your should consider:
- Building and Contents Coverage
- Crime Coverage
- Workers’ Compensation
- Business Interruption and Extra Expense
If you want to mitigate risks to your nonprofit, obtain the right kinds of coverage that suit your business needs. Not having that coverage or losing it could spell trouble in paradise; without it, you become liable for everything that could possibly happen to your organization.
Remember that insurance is pivotal. Don’t risk your livelihood to save a few bucks.
About David G. Sayles Insurance Services
At David G. Sayles Insurance Services, we strive to protect the investments of homeowners like you. Our comprehensive policies are customized for you to provide the exact coverage you need. For more information, contact us today at (800) 439-0292.