What Insurance Coverages Do Nonprofits Need?
Organizations that operate for charitable purposes are not part of the for-profit business world, but they have to abide by many of the same basic principles when it comes to managing finances. The same is true about managing risks. Why do nonprofits need insurance? In short, they need to arm themselves against potentially serious liability and loss.
Any real property that a nonprofit organization owns probably needs insurance coverage. Financing agreements or grant providers may require minimum values of coverage for funding sources. It may also be advisable to insure high-value non-real property.
Why would someone sue a nonprofit? In reality, nonprofits are vulnerable to virtually any type of claim that businesses commonly face. General liability coverage can address some of the most prevalent lawsuits against businesses involving personal injury or property damage.
Directors and Officers
Nonprofit insurance should include a policy that protects board members. Without this vital coverage, directors and officers could face personal liability in a legal action involving their service on the board or even an action against the organization.
When nonprofits insure their operations and assets, it supports their underlying mission. Being able to withstand economic harm or liability issues enables organizations to sustain their operations and continue serving their communities.