Top insurance policies for nonprofit businesses
Insurance protects your board of directors and the workers you depend on. It covers costly legal bills, medical expenses, and repairs, and may be required by state laws or the terms of a contract.
General liability insurance
A general liability policy protects against third-party lawsuits related to personal injuries, damaged property, and other accidents involving customers and clients.
- Customer bodily injuries
- Accidental property damage
- Slander and other advertising injuries
Business owner's policy
Low-risk nonprofits can bundle general liability coverage and commercial property insurance together in a business owner's policy, or BOP. It costs less than buying the policies separately.
- Slip-and-fall injuries
- Copyright infringement claims
- Business interruption incidents
Professional liability insurance
This policy covers lawsuits related to professional negligence, such as a mistake that causes a client to lose money. It's sometimes called errors and omissions insurance (E&O).
- Errors and oversights
- Missed deadlines
- Breach of contract
Directors and officers insurance
D&O insurance protects your directors and officers from legal costs related to the decisions they make on behalf of your nonprofit. They may ask for this coverage before they'll join your organization.
- Breach of contract
- Mismanagement of funds
- Failure to perform official duties
Workers' comp insurance
Most states require nonprofits that have employees to carry workers' compensation insurance. Personal health insurance won’t cover work-related injuries, which makes this policy crucial for sole proprietors too.
- Work-related medical expenses
- Disability benefits
- Legal costs from workplace injuries
Employment practices liability insurance
If a worker sues your nonprofit for wrongful termination or another violation of their rights, this policy will pay for your legal costs. It's also referred to as EPLI.
- Unfair hiring and firing practices
- Sexual harassment
- Discrimination
Nonprofit insurance costs
From our customer data, here's a quick look at average nonprofit business insurance costs:
General liability: $44 per month
Business owner's policy: $84 per month
Workers' compensation: $85 per month
Factors that can affect the pricing include:
- Type of nonprofit or social service, such as a charitable organization, childcare center, or a church
- Number of employees
- Value of your property and equipment
- Types of insurance purchased
- Policy limits and deductibles
- Claims history
How do I get nonprofit 501(c)(3) organization insurance?
TechInsurance helps you get insured quickly so you can sign contracts, comply with state laws, and protect your organization against costly lawsuits and accidents. We work only with top-rated insurance companies to secure the best possible liability and property coverage for your nonprofit.
You can get the right insurance in three simple steps:
- Fill out our easy online application with your business details.
- Compare quotes from our trusted partners.
- Pay for a policy and download your certificate of insurance (COI).
Our licensed insurance agents know the unique risks of the nonprofit and social services industry and will help you find the right coverage for your business needs and your budget. Gain peace of mind with advice from expert agents and policies from the leading carriers in the nation.
Hear from business owners like you who purchased insurance coverage.
Common questions about business insurance for nonprofit organizations
Find answers to your questions about directors and officers liability insurance and other types of coverage for nonprofits.
Why do nonprofits need D&O insurance?
Directors and officers insurance is crucial for every nonprofit with a board of directors. Here are a few reasons why you might need D&O insurance:
- It protects your board against legal costs. If a board member makes a poor investment or other decision that causes a financial loss, D&O insurance can help pay for legal costs if they're sued.
- Board members may require it. Some individuals may require you to provide D&O coverage before they'll agree to join your board of directors. They want to know they can make decisions for your company without worrying about the cost of a lawsuit.
- It helps attract top talent. Providing D&O insurance to your board members and elected officers shows them your organization is reliable, and helps attract talented individuals to fill these roles.
Nonprofits can often bundle D&O insurance with other types of management liability insurance, such as employment practices liability insurance, commercial crime insurance, and fiduciary insurance. Talk to a licensed agent to make sure your organization is getting the right coverage for its needs.
What other kind of insurance should a nonprofit have?
Your insurance needs vary depending on the specifics of your nonprofit, such as your exposure to cyber threats. A strong risk management plan might include the following nonprofit insurance policies, in addition to those mentioned above:
- Business interruption insurance covers rent and other day-to-day operating expenses when a fire, storm, or other covered property claim forces your nonprofit to temporarily close. It's also called business income insurance.
- Special event insurance provides liability coverage for accidents that happen during a nonprofit's special event, such as a fundraising gala, bake sale, or walkathon.
- Commercial auto insurance pays for legal costs in the event of an accident involving a nonprofit's vehicle. Most states require this coverage for vehicles owned by a business.
- Data breach insurance, a type of cyber liability insurance, covers expenses related to a data breach or cyberattack, including cyberextortion costs.
- Commercial crime insurance refers to fidelity bonds and similar coverages that pay for losses from theft, fraud, and other crimes.
- Fiduciary liability insurance protects against claims that your nonprofit mismanaged a retirement plan or other employee benefits.
- Umbrella insurance boosts the protection of your underlying liability policies, such as general liability, commercial auto, and employer's liability insurance (part of workers' compensation), when they reach their limits on a claim.
Explore on TechInsurance
State laws determine whether your business needs workers' compensation and other policies. Learn the requirements for tech businesses in your state and compare quotes online for free with TechInsurance.
Regulations for workers’ compensation insurance vary by state. Learn more about workers’ compensation state laws and how they apply to your small business.
Once you’ve registered as a limited liability company (LLC), your personal assets are protected against the risks of running a business. The next step is to make sure you have the right insurance coverage for your tech company.
Your startup could be the next big thing. To take your company to the next level and secure your dream by protecting you, your investors, and your team with the right startup insurance.
Business liability insurance is any type of commercial insurance that defends against accusations that your business caused damage, injury, or loss. It's recommended for all small businesses because of the high cost of lawsuits.
General liability insurance is included in a business owner's policy (BOP), a cost-saving bundle designed for low-risk businesses. General liability covers bodily injuries, damage to a customer's property, and advertising injuries. A BOP provides the same coverage, along with commercial property insurance.