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Nonprofit Liability Insurance

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Protect Your Nonprofit Organization Now!

Nonprofit organizations work with immense passion, trying to improve society. However, like any other organization, they may face unique risks along the way. For example, a liability claim or a natural disaster that causes property damage might cause the organization to incur many expenses, hindering them from doing good work.

Luckily, with good insurance policies, the organization can bounce back quickly, as the insurance provider will take care of the costs. Insurance for nonprofit organizations, also known as 501c3 liability insurance, provides specialized coverage for nonprofit organizations. On this page, you will learn everything you need to know to protect your nonprofit organization and get the best nonprofit insurance. We offer nonprofit liability insurance as part of our small business insurance product suite.

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Do Nonprofits Need Insurance?

Nonprofit liability insurance isn’t legally required in the US. That being said, many venues and funders require 501c3 insurance as one of the requirements to get into a contract agreement with an organization. Each organization may review their insurance needs and determine if they need protection. Because accidents happen and life is full of unexpected events, we recommend getting insurance for financial protection. If you need help determining what insurance coverage you need, talk to an expert nonprofit insurance agent of ours. We’d be happy to help.

Alternatively, a nonprofit risk management center can also assist the organization in carrying out risk assessments and getting the right insurance protection.

What Types of Insurance Coverage Does a Nonprofit Organization Need?

The recommended types of insurance for nonprofit organizations include general liability coverage, a directors and officers liability policy for board members, and workers’ compensation if the organization has employees. In the next section, we will go into more detail about nonprofit liability insurance coverage.

Nonprofit Insurance Coverage

Business Owner’s Policy (BOP).

Many nonprofits use this policy as a protection kick starter. It’s a customizable package that includes commercial property and business liability insurance. While it has the recommended minimum insurance coverage, you may add more coverage to enhance it and get the best financial protection

Nonprofit General Liability Insurance

What is General Liability Insurance for Nonprofit Organizations?
Liability insurance for a nonprofit organization protects an organization if it’s found liable for bodily injury or property damage to others. For example, if someone slips and falls during an event or inside the organization, they may sue and hold the company responsible, incurring recovery expenses and legal costs. With general liability insurance for nonprofits, the insurance company will cover the expenses.

Nonprofit Auto Insurance

Another important business insurance coverage for nonprofit organizations is auto insurance. If the company operates vehicles for any reason, they are required to carry auto insurance. It’s crucial in case the nonprofit-owned vehicle gets stolen, damaged, or involved in an accident.

What are the types of nonprofit auto insurance?
There are two types: personal vehicle insurance and commercial auto insurance. Personal auto insurance covers the personal vehicles owned by the employees, while commercial auto insurance covers the vehicles owned by the organization for business purposes.

Commercial Property Insurance

This coverage protects organizations and businesses in case of property damage, arising from vandalism, theft, fire, and some natural disasters. The nonprofit insurance company kicks in after you make a claim and pay the deductible to cover the repair costs up to the coverage limits.

Nonprofit Umbrella Insurance

Nonprofit umbrella and excess liability insurance is an extra layer of protection for organizations, in case the coverage limits aren’t sufficient to cover the damage. For example, if the legal costs for a lawsuit are filed against the organization, or if the property damage requires more money than the set limit, nonprofit umbrella insurance can fill in the gaps.

Cyber Liability Insurance

In our modern world, a good insurance policy should include cyber liability insurance. If a data breach happens within the organization, valuable client data might get stolen, which puts the organization at liability risk. The cyber liability policy will cover the costs of recovering stolen data and if the incident escalates, the insurance company may cover legal costs.

Employment Practices Liability Insurance

If a current, former, or potential employee of the organization files a lawsuit against the company, the insurer takes care of the legal fees. Common types of claims include discrimination, wrongful termination, sexual harassment, breach of employment contract, deprivation of career opportunity, and more.

Directors and Officers Insurance

When running an organization, mistakes happen. Unfortunately, some mistakes, like wrongful management decisions, can be costly. The costs might be an obstacle to the continuation of business operations. If a lawsuit is filed against a board member, they are protected by this insurance coverage. Many directors refuse to work for an organization or company unless they carry that insurance coverage.

Errors and Omissions Insurance

This insurance coverage is crucial for small charities and nonprofit groups. If severe property damage or any event causes the organization to stop operating. Business income insurance covers the cost of lost wages, helping employees stay true to the cause while the organization gets back on its feet.

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Other Insurance Services We Offer

Comprehensive Nonprofit Insurance Coverage in Florida and Texas:

Protecting your nonprofit organization in Florida and Texas is essential to ensure continuity and resilience. With personalized coverage for liability, property, and operational risks, you can focus on making an impact while safeguarding your mission and resources:

Who Needs Nonprofit Business Insurance?

  • Charity foundations.
  • Professional nonprofit associations.
  • Civic nonprofit associations.
  • Political clubs.
  • Trade nonprofit associations.
  • Recreation clubs.

Nonprofit Insurance for Foster Care Programs

Florida Insure understands there’s invaluable effort put into foster care programs. That’s why we extend our insurance solutions to cover foster care organizations. We offer customized services to meet the needs of the agencies and the families they serve.

Our nonprofit insurance coverage for foster care programs include:

  • General liability insurance
  • Professional liability insurance
  • Abuse and molestation coverage
  • Property insurance
  • Automobile liability insurance

We Serve These Industries

Church & Religious Organizations

Nightclubs

Schools

Charter Schools

Camps

Restaurants

Metal Manufacturers

How Much is Insurance for a Nonprofit Organization?

The cost of liability insurance for a nonprofit organization varies depending on the size, type, location, and activities of the organization. On average, nonprofits pay $500 to $600 per year for general liability insurance which covers common risks like third-party injuries and property damage. For broader coverage, many opt for a Business Owner’s Policy (BOP), which combines general liability and commercial property insurance with costs ranging from $600 to $1,200 per year. Directors and Officers (D&O) insurance is around $1,000 to $1,725 per year. Nonprofits should work with insurance agents who specialize in charity public liability insurance to get custom packages and recommendations.

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What is a Certificate of Insurance for Nonprofit?

A Certificate of Insurance (COI) for a nonprofit is a document issued by an insurance company that confirms the nonprofit is insured. It lists the types of insurance the organization has, such as general liability, professional liability, or directors and officers (D&O) insurance. The COI includes:

  • Name of the insured nonprofit.
  • Policy types and limits.
  • Policy effective and expiration dates.
  • Insurer’s name and contact information.

Nonprofits often need to provide a COI to partners, venues, or grant providers to prove they have insurance in place before hosting events or working with other organizations. This document reassures others that the nonprofit is financially protected in case of claims for injuries, property damage, or other liabilities.

Common Nonprofit Insurance Claims Scenarios

  1. Slip and Fall accidents: A volunteer or visitor falls in one of the fundraising events and gets injured. Under general liability insurance, nonprofit insurance companies cover recovery costs, including medical bills, lost wages, and more.
  2. The property may get damaged due to a fire, storm, or an act of vandalism. In this case, property insurance pays for repair costs.
  3. The directors and officers may get accused of misconduct. In that case, the organization may choose to defend them with the help of the insurance money under the directors and officers policy.

We Serve These Cities in Florida

We Serve These Cities in Texas

Nonprofit Liability Insurance Costs FAQs

On average, nonprofits pay $70 per month. In general, costs can range from $500 to $2,000 per year depending on the nonprofit’s size and the risks they face.

All nonprofits of all sizes need D&O. Directors’ and officers’ insurance is one of the most important coverages that nonprofits should start with. It protects the board members and is a big part of the risk management plan for the nonprofit. If the directors are sued, they would have to pay an average of $35000 to settle the claim.

The nonprofit organization is responsible for any debts or liability claims. That’s because members of the organization are protected by personal liability. As a general law, an incorporated entity is held responsible for its debts.

Profits and nonprofits differ when it comes to regulatory rules. The first difference is that nonprofits can issue tax-exempt bonds and accept contributions that are tax-deductible whereas profits can generate funds. Nonprofits don’t need to pay taxes while for-profits pay them.

General liability policy is one of the most important coverages for nonprofits. It protects the organization against common scenarios, like a slip-and-fall incident or accidental damage to a client’s property.

Generally, small nonprofits pay between $500 and $1,500 annually on average for basic general liability coverage. Larger organizations with higher risks could pay more, sometimes up to $2,500 or more annually.

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