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5 Things to Know before Buying Insurance for Your Nonprofit Organization

Nonprofits and social service providers know that business insurance is a necessity for safeguarding their assets. When an accident or lawsuits occurs, their policies ensure they can continue serving their communities without suffering a devastating financial hit. However, if your organization is just entering the world of business insurance and sifting through policies, researching coverages, and debating limits, it’s easy to feel overwhelmed. You might even wonder where to start!

But before you lose sleep muddling through opinions about which coverages nonprofits should carry, check out this brief introduction to the top considerations before purchasing a policy.

Business Insurance Tips for Nonprofits: The Purchasing Guide

As you shop around for adequate coverage for your nonprofit organization, keep in mind these five tips for finding a policy that works for you:

1. Take inventory of your potential risks.

1. Take inventory of your potential risks.

Because nonprofits and social services work in the heart of their communities and bring together people, employees, clients, and benefactors from all over, the potential for accidents and liabilities is great. Before you ever begin your hunt, it’s important to do a little digging and find the exposures of your organizations. For example, if you open your doors to people in the community, your business needs protection against third-party liability. That way if someone is injured or their property is damaged on your premises, you will have coverage to pay for court costs and medical expenses. You’ll also want to account for the business essentials you need to offer your services. Depending on your line of work, this may include office or buildings you use, computers and media equipment, and supplies your employees need to carry out their work.

This risk assessment will help you get a fuller picture of the policies you need to protect your nonprofit from incurring devastating losses. Once you apply for a policy, your insurance provider will conduct a similar assessment to determine the amount of risk they will accept. Your premium will depend on these risks, which is why it’s essential to fully consider the scope of the coverage you need. You don’t want any gaps in your policy.

2. Sign on with a provider you trust.

2. Sign on with a provider you trust.

If your business insurance search leads you to an “A-rated” insurance provider, know that you are off to a good start. Top-rated insurance providers offer quick payouts, industry-specific products, and competitive rates. However, if you have your hands full with your charity work, know that you don’t have to take on the work of research and vetting insurance providers yourself. When you work with the insureon’s expert insurance agents, we do the legwork for you. In turn, you save time and energy by receiving competitive quotes from nationally trusted providers in minutes.

3. Know that cost is second to coverage.

3. Know that cost is second to coverage.

Most nonprofits don’t have much money to spare, which is why you may be tempted to simply find the cheapest policy possible and sign the dotted line. However, your business insurance is a necessary expense, and without adequate coverage, you may end up harming your organization more in the event of a liability claim. Inexpensive policies may only offer a portion of the coverage you need, or they could be priced lower at the time of commitment, only to have premiums surge later on. That’s why it is most beneficial for the future of your nonprofit to opt for the types and amount of coverage you want, and make the price a secondary concern.

Also, depending on your line of work, your nonprofit may be eligible for a Business Owner’s Policy (BOP), a policy that bundles General Liability Insurance and Property Insurance at a discounted premium. Talk to your insureon agent to see if this option fits your business protection needs.

4. Choose an insurance agent who knows nonprofits.

4. Choose an insurance agent who knows nonprofits.

Licensed insurance agents who have a solid track record of work with nonprofit organizations can help your business find coverage that adheres to your state’s laws and protects you from common risks in your field. They can also advise you on the add-ons or endorsements that can fill potential gaps in your coverage. Plus, industry-specialized insurance agents know the high-rated insurance providers that offer products specifically for your type of work. Typically, nonprofit and social service companies will want to carry the following types of insurance:

  • General Liability Insurance.
  • Property Insurance / Business Owner’s Policy (BOP).
  • Directors & Officers Insurance.
  • Errors & Omissions Insurance.
  • Workers’ Compensation Insurance.
5. Read the fine print.

5. Read the fine print.

From carrier to carrier, insurance policies vary drastically. Each comes with its own exclusions, limits, deductibles, and premiums, which is why you’ll want to read up before you sign off. Understanding your policy protects you from surprises down the road — after all, you don’t want to file a claim for an event you thought was covered only to find out it’s not. While you’re closely examining your policy, take a moment to consider the deductible (that is, the portion you pay before your benefits kick in). A higher deducible may be alluring since it tends to come with a lower premium, but in the event of a covered claim, it could also compromise your finances. As a rule, don’t commit to a deductible your nonprofit could not comfortably bear out of pocket.

Lastly, take a long look at your policy limits, and consider that the litigation process can quickly cost millions of dollars, especially if your business is found guilty of wrongdoing and found responsible for paying a settlement. For this reason, you’ll want to give your nonprofit organization plenty of breathing room with its coverage. Any amount past your policy limits will be your responsibility. If you need help determining the coverage amounts that are appropriate for your needs, ask an insureon agent for guidance.

Insurance Policies Tailored for Nonprofits and Social Service Providers

The Nonprofit Specialist agents at insureon are happy to assist you in finding appropriate policies for your charitable organization. When you’re ready to streamline your purchasing process and work with agents you can trust, complete our easy online application. Depending on your needs, we may be able to send you competitive quotes in minutes!

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