Nonprofits need insurance as part of their risk management strategy. However, buying insurance is not as simple as many organizations think. Nonprofits need to consider the risks specific to their mission and environment. Speaking with a knowledgeable insurance agent will help, but it is good to know some basics before beginning the insurance process. The following are several dos and don’ts for buying insurance.
Nonprofit Insurance Dos
- Learn more about various insurance policies. Nonprofit leaders need to understand exactly what they are paying for and how to use their policies in the event of a workplace incident or claim.
- Make sure to select an agent that specializes in nonprofits and provides top-notch service. Agents need to be responsive and professional. This will ensure stellar assistance in the event that nonprofit leaders need to make a claim.
- Request a schedule of insurance. This will detail policy limits and exclusions, premiums, and special features. It should also provide suggestions for coverage options the nonprofit may be lacking.
- Ask for a better price. Organizations will never get what they do not ask for. When it is time to renew a policy, nonprofits can inquire about lowering premium rates. While nonprofits need the best value, which will not always be the lowest rate, they also need to consider their bottom line.
Nonprofit Insurance Don’ts
- Continuing with the above, nonprofits should not assume their insurance rates will go down because they did not make any claims. If an insurance company declines the request for a lower premium, do not be afraid to shop around for a new agency or compare rates.
- Do not become complacent with insurance coverage. Many organizations believe that having insurance covers 100% of scenarios and claim situations, but this is not the case. Every policy has exclusions. Nonprofits need to familiarize themselves with their coverage and implement strategies to reduce any uncovered risks.
- Do not assume that an insurance provider will automatically renew insurance policies. Sometimes, a carrier will drop an organization that makes frequent claims or accumulates expensive claims. Sometimes insurers decide they no longer wish to participate in various sectors of the nonprofit industry due to the high potential for exorbitant claims. Even a rival organization can affect insurance coverage. Insurers may receive a claim from a competitor that pushes the limits of coverage, resulting in the insurer backing out of the nonprofit market.
Learning the ins and outs of nonprofit insurance coverage can help save a nonprofit from financial ruin. The right policies will mitigate risks and provide coverage for several scenarios common to charitable organizations. If your nonprofit is in need of coverage, but you are not sure how to proceed, SteelBridge Insurance Services can help. Contact us today to learn more about protecting your organization.