Embroker’s Nonprofit Practice

Investing in the right insurance solution helps transfer risk to third parties and allow nonprofits to confidently focus on maximizing their missions and impact.

As a nonprofit, your mission is to make the world a better place. It’s not easy and there are many challenges nonprofits must face associated with operations, fundraising, public relations, volunteers, and more. No matter what your cause is or who you’re helping, your organization serves a purpose beyond the bottom line. But just because you’re a nonprofit does not mean that there’s not a lot of money tied up in what you do.

That’s why every nonprofit needs to invest in the right risk management solutions in order to allow it to continue to stay afloat and continue its mission even when potentially disastrous accidents and incidents occur. After all, a simple lawsuit can be enough to financially devastate even the best-run nonprofit organization.

We wrote this guide to help you, the reader, understand both the basics of insurance for nonprofits as well as some more advanced considerations. Our hope is that you walk away from this article a more empowered buyer, with a better understanding of the risk you can transfer to other parties via the right insurance coverage.

If you’d like help, we’d invite you to talk with a broker or get started by creating an Embroker account.  Our highly experienced insurance experts will work with you to gain a deep understanding of your unique needs before negotiating a customized policy on your behalf. For more clarity on pricing, your business will be benchmarked against similar nonprofits in your vertical.

Why Do Nonprofits Need Insurance?

In our increasingly litigious society, it only takes one accident, oversight, or misunderstanding to trigger liability lawsuits. Nonprofits can face lawsuits from volunteers, donors, employees, and government regulators. Nonprofit leadership is also often a common target for litigation. According to the Willis Towers Watson Directors & Officers Liability survey, nonprofit organizations are twice as likely to file D&O claims than public and private companies. Proper coverage will cover legal costs or damage awards in such instances.

Risk of injury to volunteers and third parties within the nonprofit sector can vary depending on the type of operation the organization is running. Nonprofits that do hands-on work, or have an office space are at risk of being held liable if an accident or an injury results from their operations or on their property.

Any nonprofit organization that engages in counseling, vocational training, and other kinds of instruction has significant professional liability exposure. This includes organizations like:

  • Churches and religious organizations
  • Volunteer health organizations and charities
  • Educational organizations and charities
  • All other nonprofits

Additionally, nonprofits have a high risk of data breaches and cyber attacks as they commonly maintain donor financial files, employee records, volunteer, and client data online. Beyond financial costs, lawsuits and data breaches can damage a nonprofit’s reputation and lead to a significant decrease in access to both donations and volunteers.

Highly-Publicized Examples of Insurance at Work for Nonprofits

  • Schenectady-based non-profit Things of My Very Own was hit by an unexpected flood that caused thousands of dollars in damages. The flooding was caused by ice thawing and refreezing on the roof of their building.
    See: Local Nonprofit Hit With Floods
  • A year after one of its employees was crushed to death, Sacramento’s Goodwill operation faced yet another new lawsuit from former workers and additional government scrutiny over its safety practices.
    See: Sacramento Nonprofit Faces More Lawsuits, New Safety Probes
  • The Community Child Care Council of Santa Clara County, Silicon Valley’s largest publicly funded child care provider, has been accused of mismanaging its employee pensions, according to a class-action lawsuit filed in the U.S. District Court in San Jose.
    SeeChild Care Nonprofit Allegedly Mismanaged Employee Pensions
  • Addiction services nonprofit OnTrack was named in a new lawsuit by former and current employees who alleged whistleblower retaliation, infliction of emotional distress, and violations of both state wage and family leave laws.
    See: Second Lawsuit Alleges Mistreatment By Ontrack Founder Rita Sullivan

Nonprofit Insurance Costs

Every nonprofit is different and so are their insurance needs and costs. The most common cost drivers tend to be the number of volunteers and employees working for the organization, the size of the NPO’s property, the services they offer, and whether or not they depend on any special equipment to perform their work.

Essentially, what they do, how they do it, and to whom they offer their services to are all aspects that affect the cost of insurance.

Working with the right partner will ensure they are not only negotiating the right coverage but the best possible pricing options for the nonprofit as well. Embroker believes in giving our clients better choices using data and transparency. We benchmark all of your policies against similar organizations in your vertical, then procure multiple quotes from an independent broker. We also cross-reference your costs with nonprofits of comparable size, policy limits, claims history, and risk tolerance.

Getting Started

Now that you have a better understanding of insurance for nonprofits, you may be wondering how all of this affects your organization and where to go from here. If you need more help or information, you can reach out to our team of expert brokers. If you prefer to get started on intelligent quotes, create your Embroker account today.

Nonprofits require unique insuring expertise and experience. Our Nonprofit Practice team will work closely with you to design a sustainable, cost-effective solution to help protect your mission with expert coverage.

Embroker is the easiest way to intelligently insure any business. We’re here to help!