Why Nonprofit Insurance Applications are so Darn Long

If you’re a nonprofit risk manager or a small nonprofit’s executive director, you’ve been tasked with completing a long-form insurance supplemental application.

Often, these applications are 12 pages long (or more). Often, they include words that don’t make any sense to you. Often, they have questions that are completely irrelevant to your operation.

Often, you worry which of the questions answered in certain ways will send your premiums through the roof.

If I had a $100 bill for every time I heard a groan or sigh when a prospective client opened up their application file, I wouldn’t need to sell any insurance.

Why They Are So Long

There are a few very logical reasons for the length of these applications:

  1. To capture a variety of nonprofits: You might run an animal shelter. Someone else might have an after school program. These applications typically can capture any kind of nonprofit. The bonus: You probably only have 3-4 pages to complete out of a 12 page app.
  2. To get a clear picture of your operations:  The standard, general business Acord applications are insufficient to evaluate most nonprofits. If you are working with a disadvantaged population or have any counseling exposure, there needs to be some out-of-the-box underwriting. The exposures are much different than a retail store or manufacturer.
  3. To underwrite non-standard coverages: Nonprofits often require Abuse/Molestation coverage, Professional Liability, Special Event coverage, Volunteer Accident coverage, etc. These coverages require additional questions.

Tool for Your Risk Management Program

Instead of worrying about all the pages, may I suggest this: View the application as a tool for solidifying your risk management plan.

These applications are natural checklists. When you come to a question about whether or not you do background checks on volunteers, it might be a good idea to institute background checks on volunteers.

If you find a question about sign-in/sign-out procedures, then maybe that’s a good thing to implement.

If you have a copy of an old application, review it. Where does your risk management program fail? What are some things that you’re doing well?

I recommend that every renewal period is viewed simply as a time to renew a commitment to risk management. Evaluate your efforts. Use those pesky, long-form applications as a grid through which you see your safety and risk management.

It’ll make it much less of a drudgery and more a part of your mission of caring for the people you’re called to help.

Questions

1.  Do you have a formal risk management program in place?

2. What tools do you use to evaluate the safety and security of your organization?

3. Do you allow your agent to complete your application for you or do you do it yourself? Why or why not?

Please leave answers in the comments below!

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