RISK MANAGEMENT
Risk management is a broad topic. It involves taking steps to minimize the likelihood of things going wrong, a concept known as loss control. It also involves the purchasing of insurance to reduce the financial impact of adverse events on a company when, despite your best efforts, bad things happen. No one likes thinking about what could go wrong. Nevertheless, as a prudent manager, you should understand the risks your business faces. Until you identify risks, you can’t make good decisions about managing them. To learn more about Risk Management, click here
LIABILITY INSURANCE
Nonprofits have no immunity from lawsuits. Clients, volunteers, vendors, donors or visitors may sue if they are accidentally injured on your premises or while on business for the organization. Someone may sue claiming libel or slander. Employees may sue claiming discrimination or sexual harassment. Liability insurance covers these risks.
Before buying insurance, it’s a good idea to consider the particular loss exposures you have and to buy a policy that addresses them. If, for example, your organization is made up mostly of volunteers and has no paid staff, your best choice could be a policy that covers only volunteers. For more information on Liability Insurance, click here
WORKERS COMPENSATION INSURANCE
States have varying rules about when an employer must provide workers compensation insurance. If your organization has three or more employees, you should check with your state department of workers compensation to see if you are required to provide workers comp insurance. For more information on Workers Compensation Insurance, click here
ERRORS & OMISSIONS - PROFESSIONAL LIABILITY INSURANCE
If your business involves services such as giving advice, making recommendations, designing products, providing physical care or representing the needs of others, you could be sued by customers, clients or patients claiming your failure to perform your job properly had harmed them in some way. Errors and Omissions (E&O) or Professional Liability Insurance covers these situations. The policy will pay any judgment for which the insured is legally liable, up to the policy limit. It also provides for legal defense costs, which can be substantial, even where there has been no wrongdoing.
BUSINESS IDENTITY THEFT INSURANCE
Business Identity Theft Insurance provides legal liability coverage to businesses that are victims of data theft. Such policies can also provide coverage to notify customers whose personal identification information may have been compromised and pay for services to provide identity theft recovery services for customers.
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PROPERTY INSURANCE
There are many aspects to property insurance. If your organization owns real estate, you will want to insure the property. If it rents or leases its premises, you may want coverage for tenants' improvements and betterments. These are fixtures, alterations, installations or additions that you have put into the space that cannot legally be removed from the landlord’s premises.
Depending on the particulars of your activity, you may want to add other coverages, such as Theft and Burglary, Employee Dishonesty or Electronic Data Loss. For more information on Property Insurance, click here
BUSINESS VEHICLE INSURANCE
Vehicles owned by a nonprofit organization will need to be insured with a business auto policy.
Anyone driving a personal auto on business for a nonprofit organization will have coverage under his or her personal auto liability policy. If the personal policy has low limits, however, they could quickly be exhausted by an accident with serious injuries. An injured party might then sue the nonprofit group. You should discuss with us whether the organization is adequately protected. For more information on Business Vehicle Insurance, click here
UMBRELLA INSURANCE (EXCESS LIABILITY)
As the name implies, an umbrella liability policy provides coverage over and above your other liability coverages. It is designed to protect against unusually high losses, when the policy limits of one of the underlying policies have been used up. For the typical business, the umbrella policy would provide protection over and above general liability and auto liability policies. If you have Employment Practices Liability Insurance, Directors and Officers Liability or other types of liability insurance, the umbrella could provide protection over and above those policy limits as well.
EMPLOYMENT PRACTICES LIABILITY INSURANCE (EPLI)
Employment Practices Liability Insurance pays, up to the policy limits, damages for which an employer is legally liable for violating an employee’s civil or other legal rights. In addition to paying a judgment for which the insured is liable, it also provides for legal defense costs, which can be substantial even where there has been no wrongdoing.
DIRECTORS AND OFFICERS LIABILITY INSURANCE
Directors and Officers Liability Insurance protects directors and officers of corporations or not-for-profit organizations if there is a lawsuit claiming they managed the business or organization without proper regard for the rights of others. The policy will pay any judgment for which the insured is legally liable, up to the policy limit. It also provides for legal defense costs, which can be substantial even where there has been no wrongdoing.
Insurance information used with permission from the Insurance Information Institute |
