Let me guess…
- Pay claims when called upon to do so.
- Be inexpensive.
- Be easily understood.
- Be simple to deal with.
Those four are universal desires from my insurance clients.
But let’s dig a little deeper and take those four off the table.
What do you want your insurance program to do for you?
Why buy insurance at all?
You Want Your Insurance to Help You Grow Your Nonprofit
Many first time insurance buyers do so because they have to satisfy a contract. Some examples…
- Mortgage: A mortgage will require a property insurance policy.
- Lease: A lease often requires a general liability policy.
- Medicaid Waiver: A contract to provide social services for the state will include certain insurance requirements.
- Grants: Sometimes, my client will call because a grant or other funding requires coverage.
- Subcontractor Agreements: I have clients who do work for local school systems and hospitals. Those entities will require various insurance coverages.
There are more, but the main point is that in order to grow a business – including a nonprofit – one must enter into contracts, invest in infrastructure, and collaborate with other entities. Each of these relationships requires insurance protection.
But in truth, whether you realize it or not, there are other things you want your insurance program to do for you. And those things must be your focus when you’re selecting the coverages and working with an agent.
You Want Your Insurance to Help You Deliver on Your Promises
Insurance’s key benefit is that it helps you move your business forward in the face of unforeseen negative events.
You want to continue to offer the services you provide and help the people you help even if a tornado rips your roof off or a volunteer gets accused of negligence that resulted in a client’s injury.
You do not want these negative events to test your ability to deliver on your promises.
Take a personal auto policy that provides rental reimbursement as an example.
An auto accident will disrupt your life. If you have rental reimbursement, though, the disruption will be less severe than if you had to start scheduling rides with people, using Uber (an insurance headache in and of itself), or otherwise inconveniencing yourself or others.
Insurance cannot prevent an event from happening although most policies require that you up your risk management game.
But if you construct your policy primarily with an eye toward protecting your operations, your people, and your key assets (vs. the likelihood of an accident), then you can be more assured that your insurance coverage will help keep your nonprofit rolling along, even while the contractors have to remediate water damage, fix a roof, and re-plumb your breakroom.