How to Buy Insurance for Your Nonprofit

This month, I’d like to provide tips on buying insurance for your nonprofit or social service organization.

Each month, I will tackle different themes, normally around specific coverage issues, but I’ve learned that the buying process is almost as daunting as understanding the differences between general and professional liability. Let’s face it, your main goal is to get it done, and do the work of your organization.

So let’s look at the initial process of purchasing coverage. Hopefully, it will be helpful for you.

An insurance professional should guide you through this process, but it can be intimidating to call an insurance agent out of the blue.  If you’ve never gone through the process before, you might feel at someone else’s mercy.

Buying Process

A Framework to Approach the Insurance Buying Process

Step 1: Define your activities – list what you ‘do’.

Step 2: List the people involved by category (i.e. employees, volunteers, board members)

Step 3: List the physical assets by category (i.e. vehicles, buildings, computers, data)

Step 4: Google ‘insurance agent nonprofit [geographical location] (if you’re concerned about having a local agent).

Step 5: Google ‘insurance for a nonprofit’ or ‘nonprofit insurance programs’

Step 6: Engage an insurance professional

Step 7: Give complete information to help the agent and any underwriters give you the right quote.

Step 8: Be open to adding risk management policies and procedures

Step 9: Review any quotes with your most trusted board or management advisers, preferably stakeholders with some solid business experience.

Step 10: Decide. Make your best decision and review on occasion

Some criteria to consider on the insurance companies.

I will remain brand agnostic here on this blog, but let me make a suggestion or two.

I included step 5 so that you could discover some of the main insurance companies that specialize in coverage for nonprofits. These companies offer features like covering certain fundraising events automatically or highlighting coverage for volunteers or being able to have higher limits on things like abuse/molestation liability.

When your agent presents the options, keep your eyes open for the companies you found in Step 5. Doing some research after you get the quote can also be helpful.

A Note about Cost

Most insurance companies will be within 5-10% of each other cost-wise. Make sure to evaluate the coverage, knowledge, and ‘ease-of-use’ of your chosen agent or insurance company. While insurance in general has become commoditized, thanks to Gekkos, Flo, and Mayhem, I would suggest assessing the value and knowledge of what you’re presented vs. heading directly to the bottom line.

What I’ve Left Out

My steps above leave out a lot. I will walk through these steps through the month of October, breaking them down in hopes you’ll be better equipped to protect the vision of your nonprofit.

The main thing is that you take some interest and arm yourself with a little info so you can have a conversation with your agent vs. praying everybody has your best interest at heart.

Policies are complex stacks of paper. But if you identify the stuff you do, the people who do it it (and who you do it for), and the things that you use to get it done, then you will be far ahead of a lot of buyers. When you get your insurance proposals, you’ll be able to ask questions like…

  • Does this cover me for my counseling activities or teaching after school classes or special events? (stuff you do)
  • Does this cover my volunteers, employees, board for any liability issues they incur? (people who help do the stuff)
  • Does this cover my vehicles, building, computer data, furniture? (the things that help you do what you do)

If you’re a seasoned nonprofit professional, hopefully this will help you, too. Your people, activities, and property might be bigger, more far-flung, and complex, but most of the principles remain the same.

Questions

What are the most annoying parts of the buying process to you?

What have you learned that might be helpful to other nonprofit managers?

Do you have any burning questions you’d like me to address during this series?

 

Trackbacks

  1. […] of the first questions to ask yourself when starting the insurance buying process for your nonprofit is this: ‘What do we […]

  2. […] October, I’m laying out a 10 step  insurance buying process for nonprofit leaders. If you’ve not, please check out Step 1. Today is Step 2: Your […]

Speak Your Mind

*