Not-for-profit organizations provide essential social services that benefit the community and their members. However, even if your organization doesn’t sell a product or generate profit, there are still a number of potential risks that can affect your employees, assets, volunteers, directors and officers, and most importantly, your mission.

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Countless claims can be brought against your not-for-profit. For example, a volunteer could sue your directors and officers for discrimination or harassment, leading to costly litigation. Additionally, should an individual injure themselves at one of your events or on your property, they could bring a claim against you. The list below provides an overview of these risks and more.

Common Exposures

Directors and Officers
  • With each decision they make on behalf of your organization, directors and officers (D&Os) of not-for-profits assume a level of risk. In the event of a claim, not-for-profit leaders can suffer damage to their reputation and personal finances. What’s more, D&O claims can come from a variety of sources, including employees, clients, volunteers, regulators and donors.
Volunteers
  • Not-for-profits depend heavily on volunteers to successfully carry out their mission. However, should one of these individuals injure themselves while volunteering, you could be held liable. What’s more, insurance coverage for volunteers isn’t always available under general liability policies. Accordingly, many not-for-profits choose to insure their volunteers under a stand-alone insurance policy.
Sexual Assault
  • Not-for-profits are at risk for false allegations of sexual assault due to the unique characteristics of these organizations (e.g., frequent, unsupervised interactions between children and trusted adults). Whether legitimate or not, sexual abuse allegations involving employees, volunteers, or directors and officers can have catastrophic consequences.
Property
  • Including your building, fixtures, office equipment, data, signage, etc.—play a key role for your organization. And, in the event of a loss caused by fire, theft, vehicles or vandalism, your not-for-profit can suffer major financial damages. What’s more, a single incident can affect multiple aspects of your property, compounding costs and downtime.
Professional Liability
  • If your not-for-profit provides counseling, training, instruction or services, professional liability exposures can be substantial. When providing these, any errors and omissions—whether intentional or not—can create serious legal concerns. Specifically, should your organization, board of directors, employees or volunteers provide advice or make decisions that harm a third party, your not-for-profit could face legal action.
Cyber
  • As more not-for-profits use databases to keep records of members, clients, volunteers and donations, cyber exposures will continue to increase. In fact, not-for-profits are a common target for cyber criminals, as these organizations often process a high volume of cheques, credit and debit card information. In addition, volunteers and employees who are improperly trained on computer and data safety could put your organization at risk of ransomware, viruses, phishing scams and malware.
Automobile
  • Depending on the services your not-for-profit offers, employees and volunteers may be required to operate a vehicle on your behalf, creating automobile exposures. While important for transporting volunteers, hosting events and other organizational tasks, the improper use of a vehicle can lead to potential accidents and major insurance claims. What’s more, if you allow employees and volunteers to use their own vehicles for work, standard auto policies are often not enough.

While the proper risk management practices can reduce certain exposures, no system is 100% effective in ensuring an incident-free workplace. As a result, it’s all the more crucial to work with a qualified insurance broker to not only assess your exposures, but secure the appropriate insurance coverage as well. To learn more, contact us today.

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