Three Types of Insurance: The Shoulds, the Have-tos, and the Don’t-Want-tos


There are a lot of shoulds, have-tos, and don’t-want-tos in commercial insurance.

There are the coverages that you should have because you have the exposure to potential loss – and you will admit it’s a good idea.

There are the coverages that you have to have because you have a contract with someone who won’t pay you unless you have the insurance.

There are the coverages that you don’t want to purchase because you don’t have to have them by contract although you should buy them because you have an exposure. You just don’t think anything bad will ever happen.

Putting budget aside (although I know that’s technically impossible), let me offer some thoughts here:

  1. A contract should NOT control your insurance coverage: While you might have to comply with a municipal contract or a grant requirement, your complete insurance program should be governed by an analysis of the operations, people, and assets that allow you to do your work in serving the community.
  2. You’re a steward: My sense often is that people don’t want to feel ‘dumb’ when they buy insurance. They don’t want to be accused of spending too much or getting duped by some sleazeball salesperson. Take some time, though, to review your options based on what you do. Even if you spend a little bit extra, the perpetuation of your nonprofit could be at stake.  In the end you have individual clients, employees, volunteers, and donors that depend on the leadership to make decisions based on stewarding this nonprofit that isn’t owned but is on mission.
  3. Prioritize wisely: The budget situation is relevant, and there might be times when your nonprofit has to prioritize insurance coverages. Some foundations or small community groups might be able to go without certain insurance while a larger group home or museum would need to make decisions based on which coverages deserved more substantial limits. One key is to start earlier and plan well.

Do I Really Need the Insurance?

In the end, the decision is in the hands of the customer. While we as agents will make recommendations, we truly hope you never have to use the coverage.

I just renewed my life insurance policy. I’d prefer not to need it.

It’s important to take the time with an insurance agent that gets your business or who will take time to understand. You can then sift through the shoulds, and the have-tos, and the don’t-want-tos and make wise, leaderly decisions.


What coverage do you have that you feel you might not need? 


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