What Coverages Do Non Profit Organizations Need?

The protections that a non profit organization needs depend on the nature of work that it does and the assets it has. A non profit may want any of the following coverages:

• Commercial Property Insurance, which may be necessary if an organization owns a building or other property
• Business Interruption Insurance, which might be appropriate if an organization has ongoing expenses (e.g. salaries and rent)
• Directors and Officers Insurance, which organizations often pay for so they’re directors and officers are protected
• Special Events Insurance, which is sometimes needed to cover fundraising and other major events
• Commercial Auto Insurance, which organizations that own vehicles typically need

Even though a couple of these coverages are referred to as “business” or “commercial” insurances, they’re useful to non profit organizations and are widely available in non profit policies.

Does Non Profit Insurance Include Workers Compensation Insurance?

In Massachusetts, non profit organizations that have employees are generally required to carry workers compensation insurance (just as for-profit businesses that have employees are required to carry). Workers compensation coverage usually isn’t included in non profit package policies, so organizations that need it typically purchase a stand-alone workers compensation policy that’s separate from their non profit policy. Getting a stand-alone policy is usually easy, though, because most agents who help organizations with non profit policies can also help organizations find workers compensation policies.

What Types of Incidents Does Non Profit Liability Insurance Protect Against?

In general, non profit liability insurance protects organizations from covered incidents in which they’re held financially responsible for property damage or personal injury. The coverage may pay both legal defense costs and settlements associated with covered incidents. (Exactly what incidents are covered by a particular policy is determined by the policy’s terms, conditions and exclusions.)

What Organizations in Massachusetts Should Have a Non Profit Policy?

Most, if not all non profit organizations in Massachusetts are exposed to at least a few risks and, therefore, should consider getting a non profit policy. The perils that organizations face vary. A new non profit in Springfield, MA, that doesn't have and resources will likely need fewer individual policies than a non profit that has multiple office locations. Almost all non profits face at least a few potential risks that they may want to insure against, though.

Just a few specific examples of organizations that may want a non profit policy include:

• Religious organizations
• Charities
• Volunteer emergency response units
• Certain historical societies
• Environmental conservation groups

How Can Non Profit Organizations Get Insurance?

For help selecting a non profit insurance policy, organizations can contact an independent commercial insurance agent who’s licensed in Massachusetts. Most commercial agents help both businesses and non profit organizations with their insurance needs.

Non profit organizations don’t define success through their earnings, but they share many commonalities with for-profit businesses. Both non profits and businesses both generally have budgets, personnel, and property -- and they’re both exposed to risks. Just as businesses use business insurance to protect them from the potential perils they face, non profit organizations in Massachusetts should insure themselves from the risks they face with non profit insurance.