No doubt some of your clients are giving back to their communities by being on the boards of non-profits. These organizations can be so focused on making a difference in the world that risk management ends up on the back burner. Non-profit insurance, while not simple, can be fairly straightforward and like all insurance, doesn’t need to wait until the organization is facing a problem to be relevant. So, while your clients serve on these various boards, we always recommend that they consider risk management as an integral part of enhancing the health and growth of the non-profit organization.
A good rule of thumb is that a mature non-profit should expect to pay between 1/3 and 1/2 percent of its annual budget on insurance. However, for smaller and newer organizations, they will likely need to spend a larger proportion to be properly covered. Generally, you can expect non-profit insurance to reflect similarities to a standard commercial policy and is likely to include these EIGHT types of coverages:
1. General Liability
2. Directors and Officers Liability (D&O)
3. Employee Practices Liability (EPLI)
4. Fiduciary Liability
5. Cyber Liability
6. Hired/Non-Owned Auto: covers drivers who are performing in their duties as employees or volunteers
7. Special Events Liability: covers field trips and fundraising events
8. Business Personal Property (BPP): also known as Business Contents this covers office items. Think of a commercial version of renters insurance.
An Important Note: It can be very difficult to find insurance carriers who will offer comprehensive packages for non-profits that fall into the “social work” class, but a good independent agent can build a package by consulting with several carriers. For your clients who are on boards of churches, insurance can be more complicated with the addition of sexual molestation coverage, counseling liability coverage, and international travel coverage. However, several carriers such as Mennonite Mutual and Grinnell Mutual have comprehensive and cost-effective packages specifically for churches.
As always, our job at Heritage Insurance Advisors is to help you add value to your clients by being your insurance consultant, working behind the scenes to serve you. Let us know how we can help your clients who are on boards of non-profits.