How to Insure Your Non-Profit Organization
Non-profit organizations and charities do valuable work and provided needed services in our communities.
With the services they provide, non-profits and charities can be susceptible to claims of third-party injury, property damage, and negligence.
As a not-for-profit or charitable organization, you need protection with an insurance package designed for what you do.
Are you a non-profit organization in downtown Toronto on Wellington Street East, Adelaide Street West, or on Carlton Street or Jarvis Street?
Or are you located on Gerrard Street East., St. Clair Avenue East, or on Bathurst Street or Finch Avenue West?
No matter your location in Toronto or anywhere in Ontario, your Western business insurance expert will give you top-notch advice and ways to save on insurance for your non-profit, charitable organization, or community service.
We’ll get you customized insurance to help protect what you do.
Did you know that there are more than 170,000 registered charities and non-profits in Canada? The sector employs approximately 2.5 million people and 41% of Canadians are volunteering their time to charities and non-profits. That’s 13 million volunteers.
Who needs an insurance package for non-profits and charitable groups?
The following should protect themselves with an insurance package for non-profit organizations and charities:
- Non-profit organizations
- Charities
- Associations
- Food banks
- Shelters
- Community centres
- Community services
- Foundations
- Societies
- Research institutions
What is insurance for non-profits and charities?
Insurance for not-for-profits and charitable organizations is a package of insurance coverages that protects these entities against the specific risks of providing services, including claims of negligence and errors or omissions.
You can be held liable for services and without the right policies in place, you could face costly lawsuits.
A non-profit and charitable organization insurance package helps protect you against these 3 claims:
1. A member of your non-profit’s board is found to have misused donations. The director is named in a lawsuit for breach of fiduciary duties. Your directors’ and officers’ insurance covers the legal expenses and settlement fees.
2. One of your staff members for your annual summer camp is accused of sexually assaulting a camper. Abuse liability insurance helps your non-profit organization defend itself against these allegations.
3. A community member receiving services falls on a wet floor at your non-profit’s headquarters and breaks a wrist. Commercial General Liability Insurance, also known as slip and fall insurance, will help cover the medical expenses and legal fees.
How much will my non-profit insurance package cost?
Factors that will influence the cost:
- Years of experience
- Annual revenue
- Number of employees
- Past claims
Here’s an insurance check list for charities and not-for-profit groups:
- Do you have the best business insurance rate for your non-profit?
- Do you have the right amount for your deductible and regularly review to make sure it’s the right amount for your organization?
- Is your number of employees up to date?
- Are you using your personal car for business purposes?
At Western, we will save you time and money by doing the insurance shopping for you to find an insurance package that suits your not-for-profit or charitable organization.
What do I need in my not-for-profit insurance package?
Commercial General Liability (CGL) Insurance: CGL insurance can cover your not-for-profit against lawsuits alleging personal injury to a person receiving a service or a person visiting your organization.
- Commercial general liability insurance generally covers medical fees, legal expenses, and settlements regardless of the outcome of a lawsuit by a third-party against your non-profit organization.
- Your CGL insurance policy should protect you from libel, slander, copyright infringement, and false advertising allegations.
Without commercial general liability insurance, your not-for-profit would be responsible for paying any liability costs.
It’s recommended that not-for-profits and charitable organizations, depending on your size, have at least $2 million in CGL insurance.
Directors and Officers Liability Insurance: The members of your board of directors are responsible for overseeing your business activities and they are required to act in the best interest of your non-profit organization. Board members and other officers may be held personally responsible to the point that their resignation or board indemnity may not be enough.
Directors and officers can be held personally liable for misuse of funds, misappropriation of funds, knowledge of illegal or improper acts, making improper loans, fraudulent acts, and transactions or decisions which are not authorized by the bylaws of the organization.
Regardless of whether an action against a director or officer is justified, the cost of defending that action can be high. This type of insurance provides coverage for these defense costs as well as other liabilities which may arise from directors and officers performing their duties.
A general liability policy for a business will not typically provide such coverage because it tends to be limited to property damage or bodily injury caused to others.
Abuse Liability Insurance: It protects employees and volunteers of a not-for-profit or charity against claims and lawsuits alleging an act or threat of sexual, physical, or mental harassment, abuse, or misconduct.
Abuse liability insurance helps your non-profit defend itself against these allegations. It can cover the defense costs and the settlement fees.
Ask your Western business insurance expert how much abuse liability insurance you need to protect your Toronto non-profit organization.
Professional Liability Insurance: If your non-profit organization offers professional advice that others rely on, you can be held liable if the advice is inaccurate or you were alleged to be negligent.
This type of insurance can provide coverage for the legal defense costs.
Are volunteers covered in a non-profit or charitable group insurance package?
Not all non-profit insurance policies automatically include coverage for volunteers. The level of risk varies across roles (i.e., administrative vs. frontline) and may require different coverage levels.
Review your policy with your Western business insurance expert to understand whether your coverage extends to those volunteering their time to your not-for-profit organization.
Commercial Property Insurance: Commercial property insurance covers the furniture, equipment, and supplies that your non-profit needs in its day-to-day operations if they are lost or damaged to due to an insured event, such as a fire, theft, flood, or vandalism.
To protect your non-profit organization or charity in the event of a sewer backup, you should consider adding sewer backup or overland flood coverage extensions, which standard business insurance policies typically do not cover.
You can also consider adding earthquake insurance.
You’ll need to have a content’s inventory if you file a claim for damage or loss due to an insured event.
Let your Western business insurance expert explain in detail what is covered with commercial property insurance.
Cyber Insurance: If you store data on people who receive your services, you are liable to protect this information.
If your computer system is hacked, cybercriminals can sell the information. Without cyber insurance, you will have to pay out of your pocket for the cost of restoring your system. You may also be liable for damages to third parties whose information has been stolen and you may have to pay for notification expenses to inform parents affected by a breach.
Business Interruption Insurance: It’s an additional property insurance coverage that covers loss of income if your charitable or not-for-profit organization suffers a disaster, and your premises need to be temporarily closed. This type of coverage can mean the difference between reopening and going out of business.
Crime Insurance: This type of coverage can protect your business from losses due to employee dishonesty, such as forging your signature or withdrawing money from your account.
Counterfeit money or money orders: Provides coverage for purchases made with counterfeit cash or money orders.
Depositor’s forgery: Provides coverage if your bank accepts business cheques that were stolen and used for fraudulent purposes.
It also covers credit card, debit card or automated teller card fraud.
Commercial Auto Insurance: If you have a business car that you use for the non-profit organization, it needs commercial coverage as part of your insurance package. Your personal car insurance usually won’t cover your non-profit organization.
What do I do if I have an insurance claim?
- Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
- Know your policy so that when you contact your broker you are familiar with what will be covered or not.
- Document the damage. Take photos right away and write down what happened.
- Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
- Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
- Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.
Western Insurance has licensed BUSINESS INSURANCE EXPERTS to get you the right insurance package for your non-profit or charitable group. Our experts are available now to help you navigate the business insurance journey to protect you and your Toronto non-profit organization.
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