What Insurance Should a Nonprofit Have?
Are you a nonprofit business and wondering what types of insurance you need? The truth is that it depends on what your nonprofit does, but most nonprofits need business owner’s insurance, cyber risk insurance, employment practices liability, general liability, and nonprofit directors and officers’ liability insurance policies. Let’s take a look at some of the insurance policies your nonprofit may need.
Business Owners Insurance
Business owner’s insurance (BOP) is a bundled insurance product that typically contains property insurance, business interruption insurance, and business liability. The reason these types of insurance coverages are often bundled is that they are the primary three that almost every business, including nonprofits, needs in order to be protected against certain types of financial loss.
General Business Liability
General business liability is designed to help financially protect your business in the event it experiences property damage from a covered event. It also helps pay for physical injuries to customers or visitors from your products, and it helps financially protect you if someone says that your advertising or marketing injured them.
Business Interruption Insurance
If the ability of your company to conduct business is interrupted like if the location is severely damaged due to a covered event, business interruption insurance helps pay for the lost business income so that your business doesn’t fail while your location is being repaired. It may also be used to help cover the costs of operating out of a temporary location while your primary location is repaired.
Commercial Property Insurance
Commercial property insurance helps pay for the repairs or the rebuilding of your business due to a covered event. This could be a weather event, fire, or theft. This insurance policy covers the physical building where your business is located, any outdoor signage that you may have, and any fencing. It also covers your business furniture, computers, electronics, inventory, and your business machinery and equipment.
Cyber Risk Insurance
If you keep any records on a computer or online, you need cyber risk insurance. This policy helps cover you for the damages caused by someone hacking into your business’ network and stealing your employees’ or customers’ information, including personal and financial.
Employment Practices Liability
Employment practices liability helps protect you if one of your employees or job candidates makes a claim against your company. This coverage is designed to help pay for legal expenses related to harassment, discrimination, and wrongful termination.
Worker’s compensation helps pay for the injuries and medical expenses of your employees if they get hurt on the job. It also helps pay a portion of their wages while they recover.
Nonprofit Directors And Officer’s Liability
If lawsuits are brought against your nonprofit for the actions of the nonprofit, you could be liable for the financial costs of the litigation and any settlements if you don’t have nonprofit directors and officers’ liability.
Other Types of Insurance Your Nonprofit May Need
In addition to the above insurance policies, you may want to consider getting these additional insurance coverages.
Commercial Car Insurance
If your nonprofit operates buses, vans, or other vehicles during the course of its operation, you’ll need to have a commercial car insurance policy. This includes if you pick up or deliver food and supplies, driving people to and from the airport, or using the vehicles on other work-related tasks.
Kidnap and Ransom Insurance
If your employees work abroad in areas where kidnappings are common, you’ll want to have a robust kidnap and ransom insurance policy. This helps ensure that you can get the funds needed in order to ensure your employee’s safe return.
Fidelity and Crime Insurance
While we’d all like to believe that everyone is honest, trustworthy, and upstanding, crime and theft do happen. Fidelity and crime insurance help financially protect your nonprofit in the event an employee is dishonest, steals, or commits fraud against your nonprofit. It also helps protect you against funds transfer and computer fraud, as well as accusations of social engineering.
ERISA Fidelity Insurance
ERISA Fidelity Insurance is a good idea if your nonprofit offers certain types of benefits to your employees, like retirement accounts. This insurance helps financially protect those investments if the funds are lost due to mismanagement or misdeeds, including theft, larceny, and embezzlement.
Errors and Omissions Insurance
If your nonprofit sells products or services in the course of its operation, you’ll need errors and omissions insurance. This policy is designed to financially protect you if a customer accuses you of making a mistake or selling a defective product.
Nonprofit Insurance with Fearnow
If you own a nonprofit and need insurance, our agents at Fearnow can help you determine which policies you need and the ideal limits for those policies. To learn more and to get a quote, give us a call at 813-689-8878.