What Types of Insurance Do Non-Profit Organizations Need?
Non-profit organizations come in all shapes and sizes. Therefore, there are several types of insurance to operate safely and responsibly within their communities. Here are a few that you might need to consider:
Directors & Officers Insurance – Directors & officers insurance provides coverage for investigation and legal costs from claims of errors, misjudgment, negligence, misleading statements, workplace harassment, conflicts of interest, etc.
Commercial General Liability Insurance – Also known as CGL insurance, commercial general liability insurance provides coverage for bodily injury and property damage arising from the operations of your non-profit organization.
Commercial Property Insurance – Your non-profit organization needs offices and other structures to operate. Commercial property insurance protects your property and equipment from damages and losses caused by theft, fires, earthquakes, floods, etc. It ensures that the replacement and repair costs of your property and equipment are covered.
Cyber Liability Insurance – Non-profit organizations store a lot of sensitive information protected by law and confidential. If there is a hack or data breach, or your operations are interrupted because your data is compromised, cyber liability insurance covers expenses such as rented equipment, operation costs, legal fees, damage to third-party, ransomware fees, etc.
Commercial Auto Insurance – Commercial auto insurance provides coverage for medical, property damage, loss of income, disability benefits, etc., arising from vehicle accidents and collisions.
What Basic Insurance Coverage Should a Non-Profit Consider?
All non-profit organizations should consider commercial general liability insurance for financial protection against lawsuits. A basic commercial general liability insurance policy will provide a $2 million coverage limit, but you can always purchase more insurance as needed.
Directors & officers insurance coverage is also important because directors and officers can be targets of lawsuits and wrongful act accusations. It can also help you attract funding because directors & officers insurance protects the investors. The amount of coverage you have depends on which insurance agreements you purchase.
Do Non-profits Need Liability Insurance?
It’s always better to be protected than to risk a lawsuit or financial loss.
Liability insurance protects your non-profit organization, volunteers, staff, directors, and officers from liability and mismanagement claims and lawsuits as well as any costs and losses associated with the claims. In some cases, investors can ask if you have liability insurance because it ensures that they are protected if they want to provide funding for your non-profit organization.
How Much Does Insurance for Non-profits Cost?
The cost of commercial general liability insurance with a coverage of $2 million can cost on average $450. The cost of directors & officers and other insurance depends on the coverage you purchase. However, several factors impact your insurance price, such as:
- Organization size and location
- Services provided
- Number of staff and volunteers
- Organization type
Coverage Features of Insurance Solutions For Not For Profit Organizations
- Defence Costs Outside the Limit (depending on the endorsement utilized)
- Separate Limit of Liability Dedicated to Insured Persons for Non-Indemnifiable Claims
- Duty to Defend
- Employed Lawyers Coverage
- Workplace Violence Expense Coverage
- Fiduciary Liability Coverage
- Worldwide Blanket Not-For-Profit Outside Directorship Coverage)
- Third Party Discrimination and Sexual Harassment Coverage (depending on the endorsement utilized)
- Advancement of Defence Costs if the Organization Fails to Indemnify
- No Insured vs Insured Exclusion
- Pollution Defence Coverage for NonIndemnifiable Claims brought against Insured Persons in Canada
- Coverage for Punitive and Exemplary Damages where insurable by law •
- Insured Persons includes: elected and appointed directors, de facto directors, officers, trustees and governors, managers, in-house general counsel, and equivalent positions, as well as employees, committee members and volunteers
- Pre-Determined Allocation of Defence Costs: Chubb will pay 100% of the Defence Costs incurred by the Insured for Claims that include covered and uncovered matters
- Non-Cancelable by insurer except for nonpayment of premium or when agreed to by the insured
Find the Right Insurance Solutions For Not For Profit Organizations from ALIGNED
ALIGNED works with Canada’s top insurance companies to provide custom insurance packages at affordable prices. Click Here To Get A Quote or contact one of our business insurance experts for information or with any questions you may have.