Common Misconceptions About Nonprofit Insurance Coverage

Learn more about insurance for nonprofits.

If you run a nonprofit, then it’s critical that you understand exactly what your insurance can do for your organization.  However, insurance can be confusing and the many different misconceptions regarding insurance coverage can leave you wondering what you are even covered for.  Read on to clear up some of these confusing misconceptions.

Misconception 1: Nonprofits are Safe from Liability and Lawsuits

Unfortunately, no organization is safe from liability and lawsuits.  For a nonprofit that that doesn’t generate massive funds for themselves, even the smallest issues can close their doors forever.  Nonprofits are at risk for accidental injury of employees, volunteers, and third parties.  Additionally, beneficiaries, donors, and even members of the government can place your nonprofit at risk.

Misconception 2: There’s an All-Encompassing Type of Insurance that Will Protect You

General liability coverage is an absolute must for your nonprofit, but don’t make the mistake of believing that this covers everything.  General liability insurance mainly covers injures or damages caused by your employees or volunteers.  However, there are many other risks that your nonprofit faces.  While general liability coverage is a good place to start, it’s important that you get coverage for your other risks as well.

Misconception 3: Terminology Misunderstandings

Another common insurance mishap is confusing your coverages.  Unfortunately, in the world of insurance, technical terms are shortened into abbreviations.  While this is more convenient to read and write, these abbreviations can often be confused.  Take for instance D&O (Directors and Officers) insurance and EPL (Employment Practices Liability) insurance.  D&O covers the people handling your nonprofit’s financial and operational decisions while EPL covers those in charge during accusations of harassment or wrongful termination.  Because these types of coverage are similar, they are often confused for one another.  So, when getting insurance for your nonprofit, make sure you know exactly what your policy covers.

Feeling more informed about nonprofit insurance?  Good!  If you are ready to get your nonprofit covered, then contact the experts at Colorado Nonprofit Insurance Agency, part of HUB International in Denver, Colorado at 303-894-0298.  We are ready to get you covered today!