Before Selecting Insurance Consider:
- What is the degree of risk directors are exposed?
- Can the risk be reduced other than by insurance?
- What is the cost of insurance?
- What revenue is available to pay for insurance?
- Does the purchase of insurance advance the administration and management?
- Insurance should be considered the last line of defence in risk management
What Kinds of Insurance?
- General Liability
- Sexual abuse and/or harassment
- Non-owned auto, third-party use of property
- Service of liquor, counselling, etc.
- Directors & Officers Liability
- Employment Practices Liability
- Property
- Business Interruption
- Machinery Breakdown
- Crime/Fidelity
- Special Events
Adequacy of Insurance Coverage?
- Require that your insurance agent/broker be advised in writing of all activities and risks of the nonprofit on an annual basis
- Discuss with the agent/broker your concerns of insuring the various risks your nonprofit
- Seek their advice and recommendations
- Request agent/broker respond in writing to the following questions:
- What risks that have been identified are covered?
- Who is covered under the policy?
- What is the amount of the coverage?
- What risks are not covered?
- What additional insurance should be obtained?
Limitations of General Liability
- Does not cover all liability risks
- Claims must be un-intended, un-expected event that cause bodily injury/property damage
- Pays only compensatory damages, not punitive or exemplary
Exclusions for:
- Sexual and/or physical abuse of children, Sexual harassment
- Penalties and fines
- Where the nonprofit
- Failed to advise changes in insurable risks
- Failed to advise prior claims
Limitations:
- on the geographic area
- who is covered
- on legal cost coverage
