Many nonprofits inadvertently overlook the risks that threaten their volunteers, workers, and organization as a whole. This is not to say nonprofits need be more vigilant than for-profit organizations; but rather that it’s crucial to prepare for the risks unique to their field of work.
State laws require for-profit organizations to provide workers’ compensation insurance. Volunteers fall into a gray area, and nonprofits need to discuss their liability with their insurance company. Nonprofits need to know if state laws require them to have workers’ compensation for volunteers (this depends on if the nonprofit has paid employees as well as volunteers) as well as if there are any available policies to cover volunteer injuries.
Nonprofits may not consider their premises as risky, but slips and falls do happen. If a visitor has an accident on the nonprofit’s property, that organization may be liable for the visitor’s medical expenses. The visitor may even sue the nonprofit, which can drain the organization’s limited funding. Nonprofits can alleviate this risk by investing in general liability insurance. Such policies help cover medical costs and legal fees related to third-party injuries.
Nonprofits are not immune to cyberattacks. Any organization that possesses sensitive data such as credit card numbers is a potential target. As nonprofits often receive donations from investors of significant financial means, cyber criminals may see the charitable organization as a lucrative target. Data breaches can bankrupt nonprofit organizations. Even if they survive the financial hit involved with a cyberattack, their reputation may not recover. Investing in cyber liability insurance can help attenuate the costs associated with a breach as well as restore public status.
Considerations for Special Events
General liability policies may not cover special events because they often take place off company property. While special events are great for drawing in potential donors, they pose unique challenges. Anytime a nonprofit organization hosts an event, they are liable for providing a safe environment. To reduce their exposure, nonprofits should discuss special event insurance with their insurer. If the nonprofit plans to serve alcohol at the event, they need to talk with their insurance company about liquor liability insurance as well.
Navigating the various risks facing nonprofit organizations can be difficult and confusing; SteelBridge Insurance Services can help. With over 40 years of experience providing risk management services, we can help your nonprofit identify risks and put solutions in place to mitigate them. Contact us today to learn more.