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Non-Profits

There are legal definitions that define a nonprofit. This includes 26 types of non-profits recognized by the IRS. The common definition is broad; a tax-exempt organization that serves the public interest. In general, the purpose of this type of organization must be charitable, educational, scientific, religious or literary. The public expects to be able to make donations to these organizations and deduct these donations from their federal taxes. Legally, a nonprofit organization is one that does not declare a profit and instead utilizes all revenue available after normal operating expenses in service to the public interest.

“A nonprofit is an organization of people who make it their mission in life to benefit their community.”

Beyond the legal definition, a nonprofit is an organization of people who make it their mission in life to benefit their community. You provide a service that helps those around you; often at your expense and time with little fiscal reward. Sadly, your care for those around you is a risky endeavor. Therefore, you have to take steps to protect yourself and your organization. This is where Conner Agency can help your organization.

Conner Agency serves as your risk manager. It is our job to not only provide insurance coverage but to identify and help reduce those exposures for those risks that can harm you or your organization. You work with attorneys and accountants to protect your assets. A risk manager brings other disciplines that can benefit your organization. No two non-profits are alike. But there are some general things non-profits should consider in risk management. Review the following issues to consider when reviewing the risks of non-profits.

Covering Volunteers

Who can sue your board

Use of personal vehicles

Issues to consider when reviewing your risks!
  • The Board, employees and volunteers of the nonprofit must all work together to assure the financial security of the organization. This includes taking steps to remove, reduce or transfer risks. Insurance is the method of transferring to another the risk of financial loss from a possible but presently unknown event.
     
  • Liability policies include four separate lines of coverage: General, Professional, Directors and Officers and Automobile (not including workers’ compensation and employers liability). These can be combined or issued as separate policies. Each coverage line provides distinctly different yet critical protection for the organization. Lacking either line could expose the organization, employees or volunteers to financial loss.
     
  • Assure that coverage for abuse is included and if the organization has employees, that Employment Practices Liability Insurance is included. 
     
  • Assure that your social service general liability policies provide that volunteers are included as an insured. This means that their activities on behalf of the agency would be covered in the event of a law suit. It is hard enough to find those who will volunteer. You should not leave them exposed for their generosity.
     
  • Volunteers need to be advised (preferably in writing) that, unless they are covered under the organization’s workers compensation, they must be responsible for their own medical insurance in the event of an accident or injury. This includes assuring their private passenger auto policies includes proper medical payments coverage.
     
  • All persons performing duties on behalf of the organization who are professionals by training should be identified to your insurance carrier whether they are employees, 1099 contractors, or volunteers. Often, these professionals have their own professional liability coverage and you can reduce your cost by assuring they retain responsibility for their actions.
     
  • All special events should be reported. Information needed includes date, number of participants, activities, amount of money expected to result and whether liquor is to be served or not. You may have limited or no insurance protection for unreported special fund raising or social events.
     
  • Employee and volunteer theft of the nonprofit and client’s assets are a real and common risk. Crime policies (employee dishonesty) address the risk of loss from employee theft. It is required under a crime policy that a person who reconciles the bank statement not be the one who deposit or withdraw and countersignatures on checks (except small petty cash type checks).
     
  • It is important to maintain driving records of anyone driving on behalf of the organization. This is true regardless if they use your vehicles or theirs. You need to obtain employee releases and keep annual Motor Vehicle Reports on file.
     
  • Maintain claim reporting information. Find out what you should do in the event of a serious claim, such as a tornado or automobile accident with serious injuries. Have emergency procedures and contact numbers ready.
     
  • Work closely with our office.  No question is too small! Ask questions. Tell us when you add programs, locations etc. Make Conner Agency part of all your planning processes.

       Let Conner Agency be your organizations’ risk manager.
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    This is a simple review of the most common things you can do to protect your organization. Call Conner Agency today to arrange a proposal for your next insurance renewal

     agent@connerinsurance.com
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