How to Buy Insurance for your Nonprofit – Step 2:Your People

During October, I’m laying out an 11 step  insurance buying process for nonprofit leaders. If you’ve not, please check out Step 1. Today is Step 2: Your People

Buying Process Step 2

Buying Process Step 2

After identifying the activities and programs common to your organization’s operations, identify the people who are associated with your nonprofit.

Now that you’ve brainstormed the activities, you can put people in the seats, as it were.

The Question:

What ‘categories’ of individuals (either individuals or organizations) show up at your meetings, events, fundraisers or are otherwise involved financially, physically, etc?

Identify the People

Some categories to get you thinking along these lines:

  • Volunteers
  • Employees
  • Independent Contractors
  • Clients
  • Consumers
  • Students
  • Customers
  • Funders
  • Partner organizations
  • Governmental entities
  • Donors
  • Board members

Who are the individuals and corporate or organizational partners that either help you do your work through labor or funding or who benefit from your work through your direct services or other indirect benefit?

In essence, the first thing to do in this step of the process is to list the people. If you want to take it a little further, put names and faces on your list as you ask the next question…

How do you want to cover them?

For example, one of the most common questions I get is this: “Are my volunteers covered?” 

The answer is normally “yes”, but I still need to understand what my client means.

The two different things that my clients mean when they ask “is _________ covered”:

  1. Coverage for injuries to that person or organization
  2. Coverage for injuries because of that person or organization.

Get clear on this: Are you worried about something happening to the person or because of that person (or both)?

As I mentioned above, put a face and a name next to your list and consider this question about protecting and defending.

As you can understand, different insurance policies will address different exposures.

For instance, your General Liability policy will cover your employees if your employee is negligent in his work for you. On the other hand, a Workers Compensation policy will cover your employee if he gets injured. But we’re getting ahead of ourselves. At this point, we’re simply identifying people and what are general concerns are.

You Care; Therefore, You Insure

Since you want to be conscientious and protect the employees, volunteers, board members, and funders that are vital to your operation, you take out the appropriate liability policies. You also take out the appropriate workers compensation and volunteer accident coverages.

Similarly, since you care about the population you serve, you have sufficient liability insurance to compensate individuals who might be injured because of negligence within your organization.

The ultimate goal is to protect the vision and mission of your organization so you can continue to do your important work.

No one intends to be negligent. Most of my nonprofit clients are super-sensitive to risk management and being responsible in their hiring and management controls. But if something accidentally happens, don’t you want policies in place to protect and defend the people who do your work, who you do your work for, and who help fund and manage your organization?

So… Step 2, in Summary

After defining and listing the activities (step 1), list the people (step 2). Our focus  as we go along is more about insurance and risk management to address what we know. 

In other words, while we’re aware of the exposures inherent to our businesses, we don’t focus on ‘the percentage chance’ that a particular loss will happen.

We focus on protecting the people, things, and operations we know are affiliated with our organizations every day. Once we establish the coverages, we start making decisions based on budgets, other risk management methods, and risk comfort levels.

So… go make your second list: the people.

Next up: Identifying the things associated with our operation.



  1. […] Step 1, we talked about defining the activities and programs common to your nonprofit. We then, in Step 2, discussed identifying the people important to your […]

  2. […] This section will lay out pretty clearly (once you get used to the contractual language) which categories of people have coverage under the […]

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