Nonprofit and Social Service 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.

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.