Summary: Nonprofit organizations face unique challenges as they work to support their missions. Learn more about the importance of nonprofit insurance coverage, specifically a management liability policy, and how it can help protect their organization. Nonprofit organizations work hard to support their missions. Whether they are feeding the less fortunate, funding critical research or protecting our environment, nonprofits drive to support and improve their communities while helping those in need.
Nonprofits also face unique risks that can set them apart from other types of businesses. For example, they often work with vulnerable populations such as the elderly, young children or those with special needs. Additionally, even though their missions support worthy causes, nonprofits can still be prime targets for lawsuits for a variety of reasons. This means it’s imperative that nonprofit organizations have the right
insurance coverage to protect their people, assets and missions.
What Kind of Insurance Does a Nonprofit Need?
The right nonprofit insurance coverage helps protect the organization from a variety of losses. In the nonprofit world, one unexpected, large expense could even lead to the end of the organization. The types of insurance all nonprofits should consider include:
- General Liability
- Commercial Property
- Professional Liability
- Automobile
- Directors and Officers Liability
- Workers’ Compensation
Many insurance carriers also offer a management liability policy, a customized solution that addresses the unique exposures nonprofits face. AmTrust’s Management Liability policy is a standalone product that complements our Nonprofit Package and Workers’ Compensation products to provide the organization with a one-stop insurance solution.
Nonprofit Management Liability Insurance Coverage
A nonprofit management liability policy helps ensure the organization is covered during both the good times and the not so good times. Keep in mind that nonprofit board members may be less familiar with running an organization than officers in for-profit businesses, potentially opening them up to certain liabilities. Nonprofits can also face negligence claims, fundraising issues, sexual harassment claims against a board member and more.
Nonprofit management liability coverage differs from general liability coverage in that it includes several customized coverages rolled into one. General liability provides coverage to a business for bodily injury, personal injury and property damage caused by the organization’s operations, products or when an injury occurs on the premises. Nonprofit management liability policy includes the following coverages:
- Directors & Officers (D&O) Liability: D&O liability coverage protects the past, present and future directors and officers against allegations of negligence or mismanagement. It covers costs and damages that arise from wrongful action allegations and lawsuits brought against members of the board of directors or an officer of an organization.
- Employment Practices Liability (EPL): EPLI coverage helps safeguard businesses against employee claims and lawsuits alleging inappropriate or unfair acts. This type of policy insures nonprofits against suits alleging harassment, discrimination, wrongful termination and other employment-related matters.
- Fiduciary Liability: Provides coverage for actual or alleged breaches of fiduciary duties for any Employee Benefit Plan, including obligations and responsibilities imposed by ERISA, COBRA, HIPAA or similar federal, state or local laws and negligent acts, errors or omissions in the administration of employee benefits.
- Network Security and Privacy Liability (Cyber): Nonprofits can be at an increased risk for a cyber attack due to the fact that hackers often think these types of organizations have large coffers, and scammers use a variety of methods to obtain sensitive information. A network security and privacy liability policy, or cyber liability policy, covers a nonprofit for suits arising from their internet and electronic activities.
Nonprofit Insurance Coverage from AmTrust Financial
AmTrust Financial understands the unique risks nonprofits face, and our agents can address the specific challenges of nonprofits and government employers. We provide a variety of
nonprofit insurance coverage tailored to the needs of nearly every type of nonprofit organization. To learn more, please
download our sell sheet or contact us today at
NPDO@amtrustgroup.com.
This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.