Charity Insurance Policy Information
Charity Insurance. Charities are subject to the same level of scrutiny and bureaucracy as commercial businesses. Just like company directors, trustees and charity managers are legally responsible for their charity's activities; from finance to health and safety, volunteers' welfare, to the promises a charity makes.
For this reason, they need insurance to provide cover against various risks. An accident involving a visitor at a fundraising event, or an allegation of wrongdoing against a volunteer injuring themselves while working for the charity could have disastrous consequences. Few charities have the financial strength to pay the costs, damages and any awards made against them in the event of a claim. charity insurance provides protection against these scenarios, giving you the peace of mind that if something unexpected happens, your organization is covered.
Charity insurance protects your non-profit or social service organization from lawsuits with rates as low as $27/mo. Get a fast quote and your certificate of insurance now.
How Much Does Charity Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small charities ranges from $27 to $59 per month based on location, services offered, payroll, sales and experience.
What Kinds Of Charity Insurance Does My Organization Need?
There may be certain types of insurance that your charity is legally required to take out, and there may also be optional charity insurance policies that you will choose to purchase, to ensure you're comprehensively covered, which is why it's important to do research.
The policies that you include in your charity's insurance package may be influenced by a number of factors, including the size and nature of your organization, and the work it carries out. That said, there are likely to be a handful of risks that your charity could be exposed to, no matter what its circumstances. So, you need these basic charity insurance coverages:
General liability insurance (CGL) covers third party property damage or personal injury claims against you or your charity. With charity insurance you're covered for:
- Third-party bodily injury or property damage claims against your charity.
- Public liability at your premises and at fundraising events such as: fetes, craft fairs, walks, dinners, fun days, etc.
- Replacing third-party keys, locks and pass cards lost while in your care.
For example, if a member of the public trips over the cable that's powering your projector and breaks her ankle, your general liability insurance pays any compensation that's due, and your legal defense costs. And if one of your volunteers spills coffee over a visitor's laptop, it's still your general liability policy that pays for its repair or replacement.
This type of charity insurance protects your buildings, contents and stock against damage from causes including fire, explosion, storm, falling trees, vandalism, escape of water, vehicle impact and theft. Flood and earthquake are not part of a standard business property policy.
Directors & Trustees Liability
Trustees are legally responsible for a charity's activities, in the same way that directors are responsible for a business' activities. This means having oversight of things like fundraising and donations, as well as making sure your people are looked after and that your charity complies with relevant laws.
If someone alleges your charity's done something wrong, as a trustee, it's your responsibility to defend the claim. charity insurance for trustees' insurance gives you expert legal representation and pays any fines you're liable for. You're covered for:
- Your personal liability as a trustee.
- Actual or alleged 'wrongful acts', including breach of trust, defamation and negligence.
- Legal defense costs and damages.
Professional liability, also known as errors and omissions, protects your charity if it provides services or advice. Perhaps your charity helps people start businesses, designs websites to publicize other people's events, or lists other products and services? Giving advice or services exposes your charity to the risk of negligence claims and could mean it's forced to defend its reputation, whether or not the accusations are just.
With this type of charity insurance you're covered for:
- Protection against mistakes your charity makes.
- Legal defense costs if your charity infringes someone else's copyright.
- Coverage for damages and fines.
This charity insurance policy covers any compensation that your organization has to pay if you accidentally share someone's details with a third party, for example. Lists of wealthy donors are common hacking targets. Plus, it pays for your charity's defense costs, if that person sues you for doing so. You're covered for:
- Financial losses caused by your charity's mistakes and things you've failed to do.
- Compensation and defense costs if someone brings a data protection claim against your charity.
Many charities have employees and also will use the services of volunteers. Many states class volunteers as employees, even if they're unpaid, temporary, part-time, or simply helping out. And because they're classed as employees, their health, safety and welfare is your organization's legal responsibility.
Without workers comp, your charity or social services organization would have to pay out of pocket for lawsuits or medical bills if an employee or volunteer experiences a work-related injury or ailment. Plus it is required in most states anyway.
Equipment And Business Interruption
Equipment charity insurance covers the things your charity takes out and about, from tables and chairs to computers and display screens:
- Loss, theft or accidental damage to your charity's property.
- Damage caused by fire, storm or operator error.
It's an 'all risks' policy which, as the name suggests, means your charity's property is covered in all reasonable circumstances including theft, fire and accidents. If there is a disaster and your charity's forced to move out of its premises, business interruption cover pays for your charity to set up somewhere else.
Charity and social services insurance is designed specifically for the sector to give you peace of mind that all your vital assets and people are covered and safe. It's important to find a competitively priced policy that offers flexibility and sufficient coverage to support the groups, communities and individuals you are involved with.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Commercial insurance steps in to help you manage these risks, avoiding a situation which requires you to pay exorbitant costs out-of-pocket.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Additional Resources For Non-Profit Insurance
Find useful articles on business insurance for non-profit 501(c)(3) organizations, charities and associations.
- Animal Shelter & Pet Rescue
- Credit Union
- Fraternal Organization
- Labor Union
- Parent Teacher Organization
- Public Administration
- Social Work Services
For 501(c) Non-Profits - Directors And Officers Liability Insurance has become an increasingly important policy to have. D&O coverage protects insured directors or officers against claims involving allegations of wrongful acts occurring while performing their duties as such. The insurance is divided into two separate coverages:
Side A coverage reimburses the individual directors and officers for payments made for loss each has incurred because of wrongful acts.
Side B coverage reimburses the corporation for the payments it has made on behalf of the directors or officers themselves.
General Liability is a foundational policy for almost any business. Most companies do not have any control over the final cost of injuries to a person injured because of their operations, products, or services. The person injured may be a young child, a blue-collar worker, a surgeon, or a homeless person.
The cost of the injuries may be comparatively minor or run into the millions of dollars, depending on the person and the extent of his or her injuries. Do you have sufficient assets to pay such a loss?
Commercial general liability insurance is designed to help you protect your assets with three main coverages:
- Coverage A: Bodily Injury and Property Damage Liability
- Coverage B: Personal and Advertising Injury Liability
- Coverage C: Medical Payments
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Computers, Valuable Papers and Records, General Liability, Directors and Officers Liability, Employee Benefits, Professional, Umbrella, Hired and Non-owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Fine Arts, Musical Instruments, Commercial Articles Floater, Computers, Cyber Liability, Employment-related Practices, Business Auto Liability and Physical Damage and Stop Gap Liability.