Non-Profit Insurance

A non-profit insurance policy can be customized to suit an organization’s particular needs. However, in most non-profit policies, you can expect the following coverages:

• Commercial general liability (CGL) insurance: Any business or non-profit organization can be held liable for accidents or events that can happen in the day-to-day running of a business. Consider a third party that slips and hurts themselves during a charity event you’re hosting. In this case, you could be held liable for their related medical bills. If you have a CGL policy, you may be financially covered for those bills. With CGL, you can also be covered for liable events such as accidentally causing third-party property damage.

• Directors and officers (D&O) liability insurance: If you have an executive committee or a board of directors, these members can be held individually accountable for their actions. D&O liability insurance protects your past and current board members (and their personal assets) if they’re alleged in a claim to have violated their fiduciary responsibilities. For example, suppose a board member is alleged to have made a misleading statement about the company that granted them access to extra government funding, resulting in a lawsuit against the board member directly. D&O insurance could provide financial protection for the legal fees associated with the lawsuit and settlement fees.

• Professional liability insurance: Many non-profit organizations provide their support through professional advice. If your organization offers professional advice that others rely on, you can be held liable if the advice is inaccurate or you were alleged to be negligent. For example, say your business provides free financial support to low-income families, and it’s alleged that your advice caused a third party to lose their savings. Even if you think this isn’t true, you could be taken to court. In this case, professional liability insurance can provide coverage for the legal defence fees.

• Commercial property insurance: If you own or rent the space where you conduct business, commercial property insurance can provide protection should that location be damaged due to an insured event, such as a fire, vandalism, or theft. For example, say you conduct the majority of your work out of an office in a strip mall. One of the adjacent units catches fire and causes severe smoke damage to your office space. Commercial property insurance may cover the professional cleaning costs, smoke odour removal, and damage to business equipment.

Additional coverages:

• Abuse liability insurance: This coverage protects employees and volunteers of an organization against claims and lawsuits alleging an act or threat of sexual, physical, or mental harassment, abuse, or misconduct. Suppose an employee is alleged to have physically threatened a third party. Abuse liability insurance can cover the defence costs and the settlement fees.

• Cyber liability insurance: This coverage provides financial protection for confidential data stored on your computers and servers if it is compromised. Say an accidental data breach left your clients’ data vulnerable to hackers. Cyber liability insurance could provide financial support for your legal costs and damages related to data breaches, repairs and restoration of your computing systems, and credit monitoring for your affected customers.

• Legal expense insurance: If you don’t have an internal legal team, consider adding this coverage to your policy. Legal expense insurance provides your organization with access to legal advice from an experienced lawyer. It can cover the cost to retain a lawyer to deal with a specific set of common issues.

• Event Liability Insurance: Non-profit organizations hosting and organizing events — fundraisers, arts and culture expos, community events, educational workshops — need event liability insurance to cover their liabilities. Event liability insurance is designed to cover expenses related to third-party bodily injuries and third-party property damages that may unfold during your event.