The nature and business goals of nonprofit organizations are unique, therefore, their insurance coverage must be. Providers are working with the demands of the sector to provide adequate policies.
The challenges that nonprofits face stem from their unique goals. While championing for a worthy cause, nonprofits also employ millions of income-reliant individuals while also facing obstacles that for-profit companies do not. With unique organizational goals also come unique requirements for specialty markets insurance.
Finding the Right Price
While there are some nonprofits that have extremely high revenues and successful executives, they are not intended to make people rich. One liability claim can wipe out an entire organization, depending on how robust their finances are. Finding an affordable policy for a select nonprofit that will also help it come out on top after a liability claim can be nearly impossible.
Nonprofits face high risks due to the diverse settings in which they pursue their mission. While technology provides the option of online donations, many fundraisers and charitable events are conducted out-of-office where there is more exposure to accidents and mishaps.
To help mitigate the cost of coverage and give insureds more bang for their buck, insurers often provide amenities to nonprofits, such as group purchasing discounts, background checks for prospective employees, and consulting services. To cover all areas of exposure, nonprofits may be able to opt for a policy package, covering multiple types of liability for the right price.
Getting the Right Coverage
In order to understand what type of coverage to purchase, nonprofits must be aware of all of their risks, which can be different than a typical company’s.
Use of volunteers also brings different levels of liability exposure. Volunteers can be more prone to injury if they do not know proper procedures and possess less company loyalty than a typical employee. These risks can be covered by general liability insurance to defend against third-party claims.
No two nonprofits have the same exposures but a needed area of coverage that is important for nonprofits is directors’ and officers’ coverage to maintain tax-exempt status and avoid audits. If nonprofits do not have D&O insurance, for example, board members can be held responsible for funding lawsuits with their own personal assets. Many nonprofits are confused about policy needs, which is why speaking with a specialty markets insurance agent is crucial to be properly covered.
Donor retention is a common issue for many nonprofits. Not only is it difficult to attract donors, it is even harder to keep them coming back.
Recognizing this, insurers know that their nonprofit clients base a higher value on the integrity of their relationships than for-profit companies do. Factors that influence insureds’ trust are responsiveness of sales employees, understanding of coverage depth, and the complexity of the application process.
While a changing technological landscape and other outliers making it nearly impossible to determine a recipe for perfect coverage, insurers are working to identify specific market trends that cater to the unique goals of those who champion the greater good.
About Moody Insurance Worldwide
Moody Insurance Worldwide, a division of Moody & Associates that was founded in 1914, is a leading provider of risk management programs and insurance coverage to individuals and businesses across the East Coast. We write all sizes of businesses, with technical expertise in many key industry areas, and provide personal insurance programs for estates and high net worth individuals. Our licensed, experienced commercial account managers can work with you to determine the coverage that you need at a competitive rate. Contact us today at (855) 868-0170 to learn more about what we can do for you.