Thought Leadership

What is generally at risk can be categorized as follows:

• Physical damage to owned buildings, equipment, computer data, bank accounts, vehicles
• Personal injury to or injury caused by employees, clients, volunteers, board members, general public
• Loss of income generated through fund raising, sponsorship funds, grants and sales
• Liability. To protect the nonprofit for bodily injury and property damage. A big issue under the liability insurance is the ability to cover sexual harassment which includes child molestation, physical or sexual abuse
• Property. To cover loss of property/assets of the organization. Such as damage to facilities, owned and rented equipment, property/inventory related to fund raising programs and other assets
• Non-owned Auto. To protect the organization if a volunteer or employee is driving their car on behalf of the insured and an accident occurs.
• Professional Liability. To protect the organization when it has employees or volunteers who provide specialized services and have direct contact with clients, patients or customers in a professional capacity, such as social workers, counselors, case workers, registered nurses, psychologists and physicians.
• Fidelity/Crime. To protect the organization against theft of funds, forgery, robbery or burglary.
• Directors and Officers (E & O). To protect the board and certain employees for their defense and loss due to failure to implement appropriate policies, controls and procedures. One big issue is wrongful employment or termination, discrimination, sexual harassment (which may not be included under the general liability)
• Automobile. To protect the insured for accidents that occur while their employees/volunteers are utilizing the insured's vehicles for transportation of clients,l transporting goods and running errands.
• Special Events. To cover certain events and fund raisers such as book fairs, walk-a-thons, social gatherings.

• Financial stability
• Claims paying ability
• Assures adequate protection of nonprofit's operations

Due to financial constraints, many nonprofits use volunteers to deliver service. When assessing a nonprofit's exposures, the agent should obtain information on the following:

• Number of volunteers used in the operation
• Pre-screening and eligibility-for-service protocols
• Management and supervision
• Duties they perform
• Auto exposure (identify if the volunteers drive the insured's vehicles or do the volunteers drive their own vehicles on behalf of the insured)

Many nonprofits rely heavily on the use of volunteers in their service delivery and to limit and manage expenses. Volunteers have to be specifically addressed in policy forms to avoid coverage gaps. Policy forms have to be broad enough to cover affiliated foundations, chapters, etc.

Thorough hiring and screening practices should be in place to guarantee that the insured is properly screening all potential individuals that will have direct contact with their clients. Besides the initial employment application, interview and securing of references, the nonprofit should be conducting fingerprinting (especially when dealing with children) and background checks on all new hires.

Where necessary, the insured should verify that all staff is degreed and experienced in their positions held. An adequate ratio of employees/staff to clients should exist to ensure that clients/consumers of the nonprofit are adequate supervised at all times.

• Review property valuation
• Business income
• Broaden endorsements (property, auto, general liability, professional liability)
• Volunteers as additional insureds (general liability, professional liability)

General coverage needs include some of the following:

• Commercial property coverage
• Commercial general liability
• Commercial auto liability and physical damage
• Non-owned and hired auto coverage
• Sexual or physical abuse or molestation coverage
• Sexual misconduct coverage
• Employee benefits liability coverage
• Professional liability coverage
• Crime coverage
• Employee dishonesty
• Directors and officers liability
• Umbrella/excess coverage

• Financial protection from third party lawsuits. Understand and communicate what might go wrong that can lead to a lawsuit including:
  • Negligent client care by employees and volunteers
  • Property damage
  • Auto accidents
  • Vicarious liabilities
  • Misappropriation or mismanagement of employee benefits, financial activities
• Risk management concerns:
  • Employee hiring and screening procedures
  • Fund raising activities and events
  • Contracts that are in place
• Special risk concerns due to the nature of the nonprofit's operations. For example, child care, abuse exposures, housing, zoning laws, security, physical condition of buildings, etc.

• Compile a pipeline of nonprofit prospects in your community through a variety of prospecting sources, including:
  • Chamber of Commerce
  • Personal Networks
  • Rainmaker Marketing Services from NIF
• Conduct prospecting surveys with NIF Rainmaker services. These will position you as an expert, bring certain infrastructure and knowledge that can help nonprofits through difficult decisions in the future.
• As you're managing the relationships of this sales pipeline, be sure to understand the mission of each nonprofit you get to know. This will be critical in establishing trust and ultimately making the appropriate recommendations to the board.

• There are significant nonprofit prospect opportunities in every community which can go overlooked by competing brokers due to their unique needs.
• Nonprofits face unique exposures and are required to carry insurance to protect their assets and other interests.
• Many group buying programs have evolved to offer nonprofit members competitive pricing and coverage.
• Although they face unique needs, nonprofits have limited resources and need a trusted advisor (broker) more so than other segments of the insurance buying economy

• Humanitarian aid and human service organizations
• Health Care
• Education, including early childhood education and early childhood intervention
• Cognitive, speech , occupation
• After School Programs
• The Arts
• Social Issues
• Religion
• Recreation
• The Environment
• Animal Protection
• Research and public awareness
• Drug and Alcohol Rehabilitation Facilities
• Mental health facilities
• Family crisis centers
• Facilities for the Developmentally Disabled
• Food Banks
• Community Health Clinics
• Special Needs Schools
• Sheltered Workshops, Vocational Training for the Handicapped/Indigent
• Back to work programs
• Muliti-service Community Action Facilities
• Boys and Girls Clubs
• Volunteer Organizations, including fund raising, community service and charity agencies
• YWCA / YMCA
• Shelters for the homeless, elderly , family, battered women and teens

Nonprofits consist of more than a million organizations nationally. Each nonprofit operates with a managing director and a financial director who report to a board of directors generally comprised of members of the community. Funding, insurance and other major decisions are compiled by the managing and financial directors and are typically approved on through a vote by the board.