It is inevitable that every nonprofit organization will face risks at some point in the life of the organization. While you can minimize the risks, you can never fully eliminate them, which is why there are multiple types of insurance your nonprofit organization should evaluate and determine if it is needed.

• General liability insurance – This will protect the organization if someone is hurt on the organization’s property. Even if your organization does not have an office, you could still be liable if someone is hurt or property is damaged during a fundraiser or event.
• Non-owned/hired auto insurance – This will protect the organization if an employee or volunteer is in an auto accident while using their vehicle (on company business) and their insurance coverage is not enough. This can be included as part of your general liability policy.
• Directors and Officers insurance – Directors and officers insurance policies protect against claims of intentional wrongdoing by the board or the nonprofit. Most often the claims are employment related (harassment, discrimination, wrongful termination, etc.). Having a Directors and Officers policy typically covers individual board members and the organization itself.
• Workers’ Compensation Insurance – Organizations are required to have workers’ compensation insurance once they have hired a specified number of employees. This policy generally only covers employees of the organization, not volunteers. If an employee is injured while working for the organization, workers’ compensation will pay medical bills, lost wages, and other losses.
• Volunteer Accidental Medical Insurance – This policy compensates any volunteer who is injured and needs medical attention while working for the nonprofit.
• Property Insurance – A property insurance policy protects the organization’s property (owned or leased) from damage or theft.
• Fidelity Insurance – This will protect the organization from possible embezzlement.
• Social services professional coverage – This coverage covers the organization for errors made while providing for the community, for example, counseling, support groups, etc.

While your organization likely does not need all the types of insurance listed above, it is important to review this list, as well as your organization’s policies periodically and determine if there are areas the organization is uninsured.

Please contact the Not-for-Profit Niche team at Gilliam Bell Moser LLP for further guidance.

Lindsay Lang, CPA