Get to Know Insurance: Nonprofit Insurance Part Two
Last week we went over two of the most common types of coverage needed by nonprofit organizations, you can review them here. This week we would like to go over how common commercial, business, coverages can be used by nonprofits to protect the various aspects of their operation. Nonprofits face many of the same risks and exposures that for-profit businesses do, so they need insurance policies to help them mitigate those risks.
One of the most common coverages for nonprofits is a Hired and Non-Owned Auto policy. This type of insurance provides coverage for the employees or volunteers while they’re using their own vehicles. Running errands, dropping off supplies, driving between meetings and many other similar activities happen in nonprofits every day. Personal car insurance policies exclude commercial use, so this coverage is essential for nonprofits wanting to protect their employees and volunteers.
General Liability is also a very common coverage. This type of insurance is used by organizations that have regular visitors to their headquarters. If one of those visitors in injured while on the premises, the organization is liable for that injury. The general liability policy would also cover injuries to volunteers that wouldn’t be covered under workers compensation because they’re not paid employees.
Another coverage used frequently by nonprofits is Professional Liability. Some, but not all, nonprofits offer mentoring services, placement services, counseling, or advise their clients on how to navigate certain legal, medical or other processes. Doing so, usually, requires them to be licensed practitioners, counselors, lawyers and even doctors. These kinds of professionals absolutely need professional liability insurance to protect them, and their organization, from claims arising from the services rendered.
Business Auto coverage isn’t quite as common as some of the coverages we’ve mentioned however, if a nonprofit organization owns any autos for any reason, it would be a good idea to purchase commercial auto coverage. Some nonprofits deliver foods, transport clients or even provide vehicles for their volunteers while they’re on the road and if an accident were to occur, business auto coverage would be essential.
Property insurance is necessary for most nonprofits that rent or own the building they run the operation from. Some nonprofits have no building or office space because their mission doesn’t require them to or they haven’t grown enough but there are many nonprofits that lease or own buildings or warehouses that need property coverage in the event of a loss.
The last coverage we will bring up is Workers Compensation. As we mentioned above, volunteers aren’t covered through workers compensation but more and more nonprofits are hiring employees to help carry out the day to day operations rather than relying on volunteers. If an employee of a nonprofit gets injured while working, workers compensation would pay for their medical bills and a portion of the lost wages.
As you can see, from an insurance perspective nonprofits are very similar to for-profit businesses. Just because an organization doesn’t collect its profits, doesn’t exclude it from the risks that running a business brings. Next week, in the third and final installment of the Nonprofit Insurance section of Get to Know Insurance, we will be going over the risks, losses and insurance available for the events many nonprofits have to raise funds, awareness and celebrate their mission.
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