Non-profit

What Are a Nonprofit's Exposure Risks?

Numerous claims can be made against your nonprofit. For instance, a volunteer might file a lawsuit against your directors and officers for discrimination or harassment, leading to expensive legal battles. Additionally, if someone were to get injured at one of your events or on your premises, they could pursue a claim against your organization. The list below outlines these risks and more, helping you identify potential gaps in your risk management and nonprofit insurance strategies.

Nonprofit Insurance: Directors and Officers

Directors and officers (D&O) of nonprofits assume a certain level of risk with each decision they make on behalf of the organization. In the event of a claim, nonprofit leaders can suffer reputational damage and personal financial loss. D&O claims can arise from various sources, including employees, clients, volunteers, regulators, and donors.

Volunteers & Nonprofit Insurance

Nonprofits heavily rely on the goodwill of volunteers to fulfill their missions. However, if a volunteer gets injured while working with your organization, you could be held responsible for damages. Moreover, coverage for volunteers is not always included under general liability policies, which is why many nonprofits opt for a separate insurance policy to protect their volunteers.

Sexual Assault

Due to the unique nature of nonprofit work, often involving unsupervised interactions between children and trusted adults, there is a risk of allegations of sexual assault. Whether the claims are legitimate or not, allegations against employees, volunteers, or directors and officers can have devastating effects on your organization.

Property

Your nonprofit’s property (including buildings, fixtures, office equipment, data, and signage) is crucial to its operation. A loss due to fire, theft, vehicular incidents, or vandalism can lead to significant financial repercussions. Furthermore, a single incident can impact multiple property aspects, leading to compounded costs and downtime.

Professional Liability & Nonprofit Insurance

If your nonprofit offers counseling, training, or other instructional services, you may face substantial professional liability risks. Errors and omissions, intentional or otherwise, during service delivery can lead to serious legal issues. If your organization, board members, employees, or volunteers provide advice or make decisions that harm a third party, legal action could ensue and having nonprofit insurance in place will be helpful.

Cyber Risks

As nonprofits increasingly rely on databases to manage records for members, clients, volunteers, and donations, cyber risks are on the rise. Nonprofits are attractive targets for cybercriminals, especially since they often handle high volumes of checks and credit/debit card information for donations. Additionally, volunteers and employees who lack proper training in data security can expose your organization to ransomware, viruses, phishing attacks, and malware.

Automobile Exposure

Depending on the services your nonprofit provides, employees and volunteers may need to operate vehicles on your behalf, creating automobile exposure. While vehicle use is essential for transporting volunteers and facilitating events, improper vehicle usage can lead to accidents and substantial insurance claims. Moreover, if employees and volunteers use their personal vehicles for work-related tasks, standard auto policies may not provide adequate coverage.

Workers' Compensation

Any time an employee or volunteer sustains an injury while on the job, your organization could face costly workers' compensation claims which should be covered in your nonprofit insurance program. Common sources of workplace accidents for nonprofits include slips, trips, falls, and musculoskeletal injuries from repetitive tasks. Routine activities like data entry or event setup can lead to accidents, resulting in increased costs for your organization.