If you run a not-for-profit organisation or charity, it can be easy to overlook the need for business insurance. Business insurance should still be a priority for a not-for-profit business, and may be even more important for companies which do not have a high cash buffer to draw on if they do get sued. Business insurance is usually tailored to the type of business that your not-for-profit is in and can include the following.
Business property covers you for damage to your physical property, as a result of fire, theft or weather. You can also in some cases obtain insurance that covers for any loss of fee income you might usually charge, as you still need to cover fixed costs such as wages while your business is out of action.
If your business operates vans, such as a soup kitchen, you will need to specifically cover the vehicles under your business property insurance to cover you for standard auto insurance issues such as crashes or theft, as well as liabilities from the services you offer.
Business or public liability
Liability insurance covers you for any damage to person or property, that occurs while on your property. This insurance covers you for the costs related to defending the claim. This can be a very relevant issue for churches and school, which may have claims when people slip, fall or damage property while on site.
In some case, such as when your organisation offers advice, you may wish to have professional indemnity for your staff or volunteers. This covers them legally if they dispense advice which is acted upon, but ends in an outcome which the client choose to sue over. This is a common issue in medical or legal clinics.
Directors of a not-for-profit also need to be covered by directors and officer's insurance which covers them from being sued for their duties as a director. This does not clear either professionals or directors if they are found to have acted illegally or criminally, but helps protect against unwarranted claims. Protecting your volunteers and staff helps you to attract and maintain the best quality talent to your organisation.
If you do not have business insurance for your not-for-profit, the costs of defending claims or repairing your property can easily bankrupt your organisation or business. Obtaining business insurance is a sensible and prudent way to manage risks associated with your business, and ensure you can keep delivering on your mission.