How to Buy Insurance for Your Nonprofit – Step 10: Make a Decision

In this final installment of the nonprofit insurance buying series, I simply encourage you to sign an application, cut a check, and make a decision.

Although I’ve laid out a pretty complex and involved process, buying insurance isn’t signing a deal with the devil or otherwise eternal commitment. Typically, you’re in for a year, but if you discover the policy doesn’t fit your needs, you can make a mid-year change.

You can iterate as you go. If you’re a startup nonprofit, then more than likely you have some time to grow in your understanding of your risk exposures and risk management options.  Even if it takes a while to decide, that’s okay.

My colleagues and I will often quote a policy for a prospective client and the client will go silent. Then, eight months later, we get a call, “Hey, you remember me? You quoted our insurance back in April of 2011? Yes, we’d like to buy that policy now.”

We think that’s a little risky, but we understand. You, as a social entrepreneur or manager, are more concerned about raising capacity and getting your programming in order and rolling along.

But alas, let’s talk about making your final decision and some of the variables involved.

Buying Process Step 10

What You’ve Done So Far

If you followed along, you will have accomplished these steps:

  1. Listed the things you do
  2. Listed the people involved
  3. Listed the stuff that helps you do the things you do
  4. Researched insurance agents
  5. Researched insurance companies
  6. Connect with the agents you found in your research
  7. Go through the application process
  8. Negotiate the details and terms with your agent
  9. Discuss and review with key stakeholders and leadership

That leaves the binding decision.

When you put a policy in place, it’s called ‘binding coverage’. It’s committing to the terms of the contract as the insurance company laid out and vice versa.

The Decision Process

You should have had plenty of opportunity to evaluate your options and come to a decision based on your needs and budget. It’s now time to give your agent the good news regarding your selection.

The process will, with variations, look something like this:

  1. Contact the agent to proceed.
  2. Agent should send you instructions
  3. Typically some form of payment is required
  4. Typically a signature or four are required on applications
  5. Finally, there are often additional bits of information that need to be confirmed. These are ‘bind contingencies’. If you do not get the information to the agent, there’s a chance the insurance company might retract their binder.
  6. Agent should send you a file certificate or binder as a confirmation of coverage

With that, you have your shiny new policy. You’ll get a large bundle of paper in a couple weeks or a disc with a pdf or an emailed pdf. Those are the typical delivery systems.

Some Mop Up Duties

Some other items to be aware of:

  • Note the payment plan and make a reminder in your calendar to look out for future installment notices: Insurance companies are NOT like the power company. They can be awfully stingy on handling nonpayment.
  • Note claims contact information: This is why you have the coverage in the first place.  Ask your agent or review your policy when you get it so you have quick access should you need to call in a claim.
  • Ask about online resources: Most companies have some form of online risk management resources or bill payment options. Find out about them and use them!

Conclusions and Final Thoughts

Thank you for taking this little journey with me. I do hope that some of these steps were helpful for you. If you have any desire to follow up or walk though the process with me, please email me or complete the ‘Request for More Information‘ form. I’m happy to help on whatever level you need it.

The main point is this: You have a vision and mission. You have been charged whether as a volunteer, paid, or board leader, to make sure your organization delivers on its commitments.

Insurance is a tiny slice to help you push forward should something unexpected happen. It’s unlikely you’ll ‘need’ it, but you want to make sure you’ve done your due diligence to give it the best chance for delivering what you want it to.

Best of luck to you and please leave comments and questions below or contact me through my form.

 

 

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