5 Factors to Consider Before Choosing Nonprofit Insurance
When running a nonprofit, it is important to plan ahead to ensure the future sustainability of your organization. In many situations, comprehensive insurance policies are necessary to assist your organization when incurring the consequences of unforeseen legal liabilities. You should, therefore, explore some of the key factors that determine whether insurance could help your organization to mitigate risks and maintain good financial health.
1. Your Situation
Each nonprofit faces unusual challenges. Your organization’s unique situation is a critical factor to consider when searching for an insurance policy. You should aim to work with a full service insurance brokerage that understands the nonprofit markets and offers customized solutions that are tailored to you. A professional broker who takes the time to understand your organization will be able to identify specialized solutions to match your needs.
2. Total Asset Value
If your nonprofit controls significant assets, protecting these assets should be your goal when searching for an insurance policy. You should make sure that you purchase the proper coverage in amounts that are at least as much as the total value of your organization’s assets, or more, to minimize the chances of facing bankruptcy in the event of a lawsuit.
3. Nature of Your Services
Some services entail a higher degree of risk than others. When buying non-profit insurance, you should understand the worst crisis that could happen to your organization. You should consider the advantages of a professional insurance brokerage agent to understand losses related to possible mistakes that you or your associates could make when rendering services.
4. Activities of Employees and volunteers
You can be held accountable for employees and volunteers who make mistakes. These mistakes can leave their employer liable for the legal consequences of their actions. If your nonprofit has active employees, or volunteers you should have an insurance policy shielding your organization from the liabilities associated with having people on your payroll or working on your behalf.
5. Activities of Directors
Courts can hold active directors personally liable for mistakes made by the organizations they represent. Although actual liability varies in each state, the defense costs can bankrupt an organization. There are insurance policies that can minimize the financial risks incurred by active directors.
How Walterry Insurance Brokers Can Help
Walterry Insurance Brokers has worked with nonprofits since the 1970s and we can help nonprofits select the optimal insurance policy for their situation to minimize liability and ensure future sustainability.