Every business owner knows the importance of risk management. Purchasing general liability insurance is a great way to protect the business from many claims, but it doesn’t typically include issues arising from mistakes and other errors. For nonprofits, it’s especially difficult to determine which insurance coverage to purchase because funds are tight.
What Type of Liability Insurance Is Necessary for Nonprofits?
It is important for the nonprofit to obtain a comprehensive professional liability package that is geared toward nonprofit organizations and includes both general liability and errors and omissions insurance.
- General liability insurance – A large majority of nonprofit insurance claims are filed due to accidents or injuries on location. Paying for the legal fees out of pocket could destroy the business, so general liability insurance is essential to protect the program.
- Errors and omissions insurance – In the past few years, the growing number of claims due to professional errors, omissions, and unacceptable employment practices have made it necessary for nonprofits to obtain this insurance. E&O for nonprofits will cover legal fees and other costs associated with these claims.
The comprehensive policy should include protection against such things as:
- Personal injury claims, including libel and slander
- Alleged negligence
- Legal costs
Running a nonprofit business is both charitable and rewarding, so it’s critical to protect the cause with a comprehensive insurance package.