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Liability Insurance FAQ
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Non Profit Liability Insurance

Although they are not in business to get rich, non-profit organizations usually have to carry non profit liability insurance. Believe it or not, non-profit organizations face lawsuits, just like any other company. The main form of coverage for these organizations is commercial general liability. Provisions include compensation for clients who slip and fall on the premises, clients who receive personal injuries as a result of the building or employees that cannot be controlled, advertising injury and third-party damages. Any form of damage that can be controlled may not be covered.

One of the most common forms of insurance designed for non-profit organizations is for social service professionals. The company or individual will purchase this coverage to compensate for any lawsuits resulting from negligence, omissions or errors in professional to peer counseling and personal damages that are not under the control of the professional or organization. Some organizations that employ medical professionals must purchase typical medical malpractice insurance also.

Non Profit Liability Insurance - What You Should Know

Another important provision on many non profit liability insurance policies is coverage for a hired or non-owned automobile. Any accidents that are beyond the control of the workers may be covered, especially if a client being transported is injured. An example of this coverage would be a social worker who removed endangered children from an abusive home and experienced a not-at-fault accident that resulted in injury to them.

Directors and Officers liability is often purchased for a non-profit organization. This form of insurance pays compensation for any "intentional" acts or decisions by directors and officers that cause harm. It is important for organizations to have this insurance, as most typical liability policies do not cover "intentional" acts.

Non Profit Liability Insurance - Umbrella Policy

Large non-profit organizations often add an umbrella policy. This allows flexibility to increase the coverage amounts of a commercial general liability policy. Sometimes the lawsuit's cost exceeds coverage, which is problematic for an organization that doesn't earn a profit they can use to pay with.

Non profit liability insurance policies usually cover the accidents and injuries of employees, students and volunteers. Since the company can't pay them directly for expenses, the insurance company will. Workers compensation is covered under this provision. Many students, especially those who are enrolled in professional degree programs, have their own form of insurance that the school requires them to carry for clinical work. However, if it isn't sufficient, this clause will usually cover any damages resulting from student workers or injuries they may suffer.