Get to Know Insurance: Nonprofit Insurance Part Three
In this week’s segment of Get to Know Insurance we will be wrapping up our section on Nonprofit Insurance. We started with some of the common types of insurance for nonprofits followed by a breakdown of how traditional insurance products / policies can be used by nonprofit organizations. If you didn’t get a chance to read those segments, you can find the first week here and the second week here.
This week we will go over a very important exposure that many nonprofits have, events. Events help nonprofits raise funds, celebrate a victory for their cause or are a way of thanking their supporters and volunteers. Some nonprofits have events many time throughout the year, whereas some only have one or two annually.
Each event poses a variety of risks that organizations should take into consideration, they also need to check with their insurance agent to make sure their existing policies provide coverage for the event. There are many different kinds of events with their own risks, some of the common risks at events are; alcohol and food sales / consumption, the use of temporary structures, stands and vendors and the use of volunteers to carry out the event.
There are more risks associated with events but those are the most common. Nonprofits typically have galas, dinners, auctions or rallies to raise funds or thank their donors. It is also common for nonprofits to ask third-party vendors to attend the event and provide things like food, drinks, alcohol or merchandise.
There are a few options organizations have when it comes to making sure their events are covered should a claim arise. Some insurers provide special events coverage on the organizations general liability policy. They do this by scheduling, adding, the events onto the policy, sometimes at a premium and sometimes for free.
The other option is a special event insurance policy. This is a policy that is specific and only applies to the event. Depending on the size of the event, the purpose, the factors such as alcohol, food, the activities or amount of people in attendance it may make better financial sense to purchase a special event policy. It is always important to check with an insurance agent that is familiar with nonprofit insurance, like us, before making any decisions.
If liquor is being served frequently at events we recommend adding liquor liability to the general liability policy. This will cover any claims that arise from the consumption of alcohol. Even if the alcohol is being served by the third-party vendor, their serving it at your event which could be argued in court as your liability.
Hired and non-owned auto coverage would cover employees or volunteers using their personal vehicles for the set-up, execution or clean up of the event. Without this coverage the organization could end up paying out for claims related to the use of autos during events.
If the event is something like a 5k run or walk, a participant coverage / accident and health policy would cover medical, disability and accidental death costs should someone get injured or die. This can be purchases for a specific event or on an annual basis and covers both participants and volunteers.
If paid employees are working at an event, workers compensation insurance would provide coverage should one of them become injured. This policy only applies to paid employees, all volunteers are excluded from this policy.
We know that events are important for nonprofit organizations which is why we’ve partnered with numerous insurance companies that specialize in both stand-alone event coverage and general liability insurance with included events coverage. If you would like more information on event coverage let us know, we are happy to help!
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