What Types of Insurance Should a Nonprofit Buy?

If you are a Charitable Organization, you may need Insurance. In some cases, if you are applying for a Grant, you may be asked to supply a copy of insurance, so don’t wait for the last minute to research, and get coverage in place, it may take time to obtain a quote, especially if you haven’t had coverage in place. 

General Liability Insurance

General Liability Insurance provides coverage against bodily injury, personal injury, and property damage caused by your organization’s operations, products, or injuries that occur on your premises. If someone is injured on the organization’s property, your nonprofit will be covered for the damages that are required to be paid to the injured person (such as a visitor, customer, supplier, or associate). These policies do not apply to the nonprofit’s employees, who are covered separately by workers’ compensation insurance.

Property Insurance

Whether you own or rent the space your nonprofit occupies, consider what your organization might lose in the event of a fire, water damage, vandalism, storm, or similar event. It is important to have property insurance that covers those risks; not only covering the building (if your organization owns it), but also your office furniture, inventory, supplies, and computers (including laptops).

Auto Insurance

If your staff or volunteers use any vehicles (including their own) for your nonprofit’s activities, auto liability insurance is a must and not just because it’s required by state law. This insurance will pay for injuries a driver causes to other people or property while carrying out your organization’s business.

Directors and Officers Insurance

Your nonprofit’s board of directors and officers (many of whom are volunteers) could be personally named in a lawsuit against your nonprofit alleging fraud or financial mismanagement. 

Professional Liability Insurance

Also called Errors and Omissions Insurance, this is a work mistake or alleged negligence, or failure to provide promised services.

Although the needs aren’t always the same, understanding the types of insurance available, in addition to a discussion with an Insurance Professional, can aid in the decision of choosing the coverages that are applicable to your nonprofit. If you have any questions or want to know how we can help your nonprofit, call Kim at The Dearborn Agency 313-562-8373.

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