Why Non-Profit Organizations Should have Insurance
Non-profit organization insurance is a policy cover which takes responsibility for all the costs incurred when a threat arises against a nonprofit establishment. Nonprofits are liable for any risks experienced within their premises despite the fact that they offer charitable services. Since each non-profit organization has different needs, the insurance policies are tailored to meet them.
Who it is for and How it Works
This type of insurance is meant for organizations that invest their surplus revenue in achieving their mission rather than dividing it among the shareholders as dividends. It works by covering all the assets under the possession of the nonprofit in case of damage, covering the costs of compensation if a lawsuit is pressed, and paying bills if someone gets injured inside the premises.
Types of Policy Coverage Offered
An insurance company only offers coverage in accordance with what is stated in their policy; although it can be specially designed to meet the nonprofit’s needs. Typically, the core policy coverage for nonprofits is General Liability. It covers damages reported by outsiders that have occurred within their jurisdiction. Professional Liability insurance covers liabilities resulting from errors and omissions by the organization.
You can also opt for Property Insurance, which covers all the assets in case of perils such as earthquakes, vandalism, fire, or storm. If the organization conducts businesses such as selling baked food, Product Liability will cover the costs if consumers claim to be affected by the foods. Board members are protected from paying damages they cause by taking a Directors and Officers Insurance cover.
Benefits of the Insurance Policy
Nonprofits make little or no profits, and therefore, without business insurance, they may end up using their savings or incoming donations to cover risks. This could lead to alteration of their budgets and consequently, incomplete projects or missions.
With insurance companies having their back, nonprofits can continue providing their services without necessarily jeopardizing their consumer information and assets.