4 Reasons Why Nonprofits Need Business Insurance
Running a nonprofit takes a very special set of skills and a lot of heart. Nonprofits aren’t known for generating much funding, especially when in their infancy stages. Even after building relationships with donors, nonprofits are still left working with a tight budget.
It’s for the reasons above that you, as the nonprofit founder and manager, should invest in business insurance for nonprofit organizations. Though you may assume that no one would see the appeal in targeting a nonprofit for financial gain, think again.
Check out four reasons why you should have a business insurance plan to cover your nonprofit.
A prospective donor slips and falls at your organization’s special event
According to Blue Avocado (a magazine that keeps nonprofit organizations abreast of news in the industry) 90 percent of claims filed by nonprofits had to do with someone falling and getting hurt on their property.
If a third-party is injured on your premises, you are liable for any injuries they should sustain. This gives the injured party the right to sue you for damages. A liability insurance plan will cover the medical costs of the third-party’s injuries and will protect you in the event that the injured party sues your organization. There are multiple types of liability insurance, so make sure to discuss exactly the type of coverage you need with a representative before agreeing to a plan outright.
The building your nonprofit operates from has been vandalized
Not everyone will approve of the work you’re working to accomplish, and in an effort to shut you down someone may break your windows or vandalize your office.
Small business property insurance will cover the costs of repairs (and replacement if necessary) to your building and office equipment. While you wait for the repairs to be made, your small business insurance package will cover your organization’s losses through the business interruption policy.
A cybercriminal will try to extort your nonprofit for money
If your nonprofit deals with helping people relocate (such as with women’s shelters), shelters individuals or offers other benefits to people in need most, a cybercriminal can use their private information to extort you for money.
For example, if your data includes where the people who use your services live, work or a new alias they go by, the cybercriminal can post that information online, potentially putting peoples’ lives in danger.
A cybercriminal can also hack into your server to post unkind, prejudiced or racist anecdotes on your NGO’s website, making it appear that you’re really a hate group. According to Portfolio, “The Red Barn, a small Alabama nonprofit offering equine therapy and recreational activities for disabled children and veterans, was hacked in April 2015 by an ISIS sympathizer. For days, the website which was hosted by HostGator, a well-known national hosting firm, displayed an ISIS flag and pro-Islamic State message. Although that message was brought down fairly quickly, it was many more days before Google stopped displaying the hacked content in search results.”
An NGO is only as strong as its reputation. If it’s found you can’t protect your data, how can you help people?
Cyber insurance will cover the cost of the ransom and all other damages associated with the cyberattack, including business interruption.
The vehicle you use for ride services was involved in an accident
To help the individuals your nonprofit works with getting to where they need to go, you offer a shuttle service. After making their last stop, your employee was involved in a fender bender and the vehicle will have to go to the shop for repairs.
A small business insurance package includes a commercial auto insurance policy. This auto insurance policy will cover the costs related to the vehicle accident and get your car back out on the road as good as new.