Types of Nonprofit Insurance

There are Several Types of Non-Profit Insurance that you Might Consider:

1. General Liability

Many fundraising activities can expose third parties to potential injury during an event. In addition, any time you attend a meeting or function, the location or actual site where the meeting or function is being held (such as a school) may waive liability for injured parties while on their property. Further, if property is damaged during an event, you may be held liable for repairs. This coverage is called Premises Liability. Another coverage within the General Liability policy, which you may find valuable, is the coverage for libel and slander. Should an official of your organization render an opinion concerning an individual either publicly during a meeting, or in private, which improperly defames that person’s character and a defamation claim is brought against your organization, then the libel and slander coverage would apply.

2. Fidelity Bond

You have a responsibility to protect the funds you raise in your organization. This should be done through the purchase of fidelity bond insurance. Several members of your board may be involved in the handling of these funds. Whether it is cash, checks, or other securities, these funds could easily be stolen or improperly deposited into their own personal account. Typically, this type of situation occurs when a trusted member of your group simply “borrows” the money for “just a little while” until they get their personal finances squared away, and then “will just pay it right back”. Unfortunately, the money is never seen again. A fidelity bond is also called Employee Dishonesty Coverage. It does just as the name implies; it provides the insurance needed to protect the money your group has worked so hard to earn from well meaning but dishonest volunteers.

3. Officers Coverage – Directors and Officers

Individual directors and officers serving as board members and those acting upon their directive are prime candidates for directors and officers coverage. Some of the basic coverage includes Legal Actions & Allegations of Mismanagement, Misappropriation of Funds, Misrepresentation, Dissemination of False or Misleading Information and Wrongful Acts. These professional liability exposures are covered when a notice of claim is filed or received. D&O coverage provides the extra piece of protection to insure the safe management and smooth direction of your organization.