Did you know that there are an estimated 1.3 million nonprofit organizations in the United States of America? One of the most important parts of running a successful nonprofit organization is having insurance for nonprofits.

It is important that you know the options for your organization when it comes to options for insurance. There are tons of insurance terms and conditions that you’ll need to be aware of. They’ll help when you’re picking the right general liability insurance for your nonprofit. You’ll also need to be active in comparing insurance costs between your different options.

The good news is that you’ve come to the right place to learn more about the must-know tips. These are perfect when it comes to choosing the right nonprofit insurance company for your organization.

Continue reading to learn more

Nonprofits Come With Risk

Nonprofits Come With Risk

One important thing to remember when you’re picking out insurance for nonprofits is that nonprofit organizations come with inherent risks. Nonprofits have an emphasis and a focus on improving and helping the community they’re located in. They pride themselves on their ability to help others.

The downside to nonprofits is that they’re saddled with the exact same risks that for-profit organizations face. Nonprofits come in all different shapes and sizes. Some are food banks while others are in the form of schools and churches. All of these nonprofit organizations face a great deal of risk.

These organizations don’t have the same resources and advantages that for-profit companies do. Getting the right nonprofit insurance is vital to success and sustainability.

Find a Knowledgeable Insurance Agent

A great way to ensure that you get the best nonprofit insurance coverage is by finding a knowledgeable insurance agent that you trust. A good starting point is finding a company that focuses on providing insurance to nonprofit organizations like church insurance providers.

Hire an insurance agency that has experience and knowledge when it comes to working with nonprofit organizations like yours. This will make the process of getting your general liability insurance a breeze. A good insurance company will advise you on the best policies for your needs and find a way to work within your nonprofit’s budget.

You Need To Get General Liability Insurance

You Need To Get General Liability Insurance

If you’re going to run a nonprofit organization then it is an absolute must that your organization has general liability insurance. The amount of general liability insurance that your organization needs to meet the requirements varies based on a number of factors.

The biggest factor that affects your general liability insurance coverage is the number of employees that need to have coverage. The size and square footage of your organization’s buildings are important too.

Consider Your Coverage Types

There are a number of options at your disposal when you start digging deeper into the types of coverage you have to choose from. Depending on the type of nonprofit organization you’re running, you’ll need different types of coverage.

General liability coverage covers things like bodily injury and damage to your organization’s property. It provides coverage should a third party claim that they’ve sustained physical injuries on your property or during your daily operations.

It also covers your organization against libel, defamation, malicious prosecution, and copyright infringement. This type of insurance won’t cover your employees so your organization should also consider getting Workman’s Compensation insurance.

There is also a policy that covers errors and omissions. This is known as professional liability coverage for your organization that focuses on negligence. Mistakes happen in any and every industry, but this type of insurance will ensure that you’re protected should something go wrong as a result of a mistake by your organization.

You might also want to consider getting special events coverage if your organization plans on hosting any special events. Events like meetings, conventions, and festivals are all things that get covered by a special events policy. This insurance covers your financial burden if you need to cancel the event due to unforeseen issues.

Property damage is another important policy to consider for your nonprofit organization. If property damage happens to your buildings it can get expensive to repair in a short amount of time. This means that it is important to get property damage coverage from your insurance company.

Protect Your Nonprofit Organization’s Assets

The purpose of nonprofit insurance coverage for your organization is to protect your organization’s assets should anything happen to your nonprofit. Getting an umbrella coverage insurance policy will make sure that your assets are protected to the highest ability.

Your liquid assets will get coverage as will your fixed assets like equipment and land. If your organization has a large number of either of these types of assets then it is a wise move to consider extended coverage policies that will grant you the most protection possible in the event that something goes wrong.

Evaluate Your Organization’s Risks


A big part of selecting insurance for your nonprofit organization is having a clear idea of the risks your nonprofit faces. A good starting point is to think about the events that your organization holds or helps out at. You also need to think of your employees and the risks that they face performing their jobs.

From there, start thinking about anything and everything that might go wrong with all of those things. This will help you figure out your most pressing issues and the places where you face the greatest risk. There are two different insurance risks. One is individual insurance risk while the other is event insurance risk.

Individual hazards involve issues like employees that experience or encounter discrimination and employees that are the targets or victims of harassment or sexual assault. You’ll also need to think of the insurance risks that come with ill employees and employees that were recently terminated.

Event insurance risk is comprised of issues like activities or events where one or more of your volunteers sustain injuries. Another big risk to be aware of is the risk of an automobile accident in which your nonprofit organization is involved. You’ll also need to think about the risks that come with injuries at your fundraising events.

Be Ready to Scale Up

Nonprofits are no different from regular businesses in that they hope to continue growing. When that growth occurs your nonprofit organization will need to be flexible and ready to scale up. That same thing applies to your insurance for nonprofits. Scaling happens as a result of good business practices.

Issues that stem from an injury or other issues with a nonprofit will cause major issues for your nonprofit organization and its growth. Lawsuits will set your nonprofit organization back both financially and with your reputation in the community. Luckily, there are nonprofit insurance policies that will protect your organization should this happen.

Budget for Insurance for Nonprofits

Once you’ve narrowed down your options and found the right nonprofit insurance company for your needs you’ll need to understand your budget and work within it. A good way to do this is by hiring an underwriter to determine what your budget is and what you can afford.

The biggest causes of expensive insurance policies for nonprofit organizations are industry risks and the size of your organization. You’ll need to be aware of policy limits depending on the insurance coverage you choose. This limit is the amount that your policy pays out in the event that something happens.

Per-occurrence limits apply to the amount of money your insurance policy will payout for a one-time event. There is also an aggregate amount that your insurance company is willing to pay over a determined amount of time. The normal length of a policy coverage period is one year.

If you want to get a higher limit then you should have no problems signing up. You’ll just need to be aware that the higher limit means you’ll face higher monthly payments. With that being said, the comprehensive coverage is worth it, especially if you plan on hosting special events on your property.

If you’re picking out an insurance policy for a large nonprofit organization then you can’t go wrong with a high limit coverage policy. This is the best way to mitigate risk for your organization. Smaller nonprofits are better off starting with a smaller insurance coverage policy and then scaling up as they continue to grow.

Get the Right Insurance for Nonprofits Today

License and Insurance

There are plenty of great options to choose from when you decide to get insurance for nonprofits. You’ll need to assess the risk associated with your organization. Determine if you’ll be hosting special events on your property. General liability insurance is a must. You should also consider comprehensive coverage options to mitigate risk.

You also need to find a trustworthy insurance agent that has lots of experience with nonprofits. Pick an insurance company that is able to scale up with your organization as it continues growing.

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