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INSURANCE BASICS FOR NONPROFITS

Presented by Becky Holt, AU CIC CPLClear Risk Solutions

Objectives

• Intro to insurance• Understanding your policy• Utilizing an insurance agent• Commonly purchased coverage • Additional coverages available• Certificates of insurance & contract

requirements• Tips for applying for insurance

Insurance is…• A traditional risk management tool• Provides financial protection• Safeguards your organization for the

future• Self-Insurance

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UNDERSTANDING YOUR POLICY

The Insurance Policy• Contract between

your organization and insurance company

• Determines coverage

• Can be broad or specific

Parts of a Policy

EndorsementsExclusionsConditions

Insuring AgreementDefinitions

Declarations

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Definitions

Definesimportanttermsusedthroughoutthepolicy

Insuring Agreement• Summarizes the

major promises of the insurance company

• States what is covered

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Conditions

Provisions

Rules

Duties &Obligations

Conditions

Yourdutiesin theeventofaclaim

Exclusions• Determines what is

not covered in the Insuring Agreement

• Describes losses from specific causes that are excluded from standard policy language

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Endorsements• Additional forms that modify the policy• Add or remove exposures• Amend definitions

Tips for Reading your Policy• Get familiar with the Declarations• Definitions explain special meanings• Review the Exclusions• Know the Conditions• Check Endorsements

UTILIZING INSURANCE AGENTS AND BROKERS

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What is an Agent or Broker?• Markets

insurance products to clients

• Represents client

• Licensed

Agent and Broker Services• Obtain insurance quotes • Assist with applications• Review quotes• Compare coverage• Advise you of options• Updates on insurance

marketplace changes• Property schedules• Policy review • Renewals• Certificates• Endorsements

• Review insurance requirements in contracts

• Report claims to carrier• Provide assistance through

claims process• Risk management advice

COMMON & SPECIALIZED COVERAGE

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Common Coverage for Nonprofits

Property (Buildings & Business

Personal Property)

Auto Liability & Auto Physical Damage

Crime or Employee Dishonesty

General Liability(Including Abuse, Products, &

Employers Liability, etc.)

Directors &Officers Liability

Wrongful Acts or Employment Practices

Liability

General Liability• Covers:

– A broad range of claim types– Direct actions of the organization – Actions of others working on your behalf

• What are the major loss exposures covered by this? – Premises Liability– Business Operations– Product & Completed Operations– Contractual Liability – Contingent Liability– Personal Injury Liability– Advertising Liability– Sexual Misconduct

Wrongful Acts Liability• Who and what does this cover?

– Organization, directors, officers, staff, & volunteers – Liabilities resulting from mismanagement or errors

• Can include various management liability related coverages:– Errors & Omissions– Directors & Officers– Employment Practices– Sexual Harassment– Fiduciary Liability

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Crime / Employee Dishonesty• Coverage for employee theft

of money, securities, or property

• Make sure volunteers included as insureds

• Claims generally happen over time

• Employees that have committed prior acts may not be covered

Auto Coverage• Automobile Liability coverage required by

state – Covers injuries or damages to others

• Uninsured/underinsured motorist coverage• Non-Owned Auto Liability • Auto Physical Damage

Property

• Covers physical assets • Consider what could be lost • Rent or Own • Valuation

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Evaluating Your Insurance Needs• What other exposures

do you have?– Professionals– Special Events– Personal information &

data – Volunteer Accident – Excess Insurance

(Umbrella)– Kidnap & Ransom

Volunteers: Coverage & Questions

• The majority of nonprofits utilize volunteers to carry out their mission.

• What types of coverage or policy items are recommended for this common exposure?

• Liability & Theft coverage– Include volunteers in definition of insured or add by endorsement

• Property coverage– Personal property of volunteers

• Auto coverage– Consider what you want to provide to volunteers driving their own

vehicles– Primary vs. excess

• Workers Compensation– Not required for volunteers – Recommended for volunteers that work regularly and/or treated like

paid staff

Volunteers: Coverage & Questions

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CERTIFICATES OF INSURANCE & CONTRACT

REQUIREMENTS

Certificates of Insurance

• Form that is not part of the policy• Serves as proof of insurance• You may be required to provide

these to others you work with• Some extend coverage

Contract Requirements • Additional Insureds• Indemnification• Limits & Coverages• Deductibles• Other Items

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TIPS FOR APPLYING FOR & RENEWING YOUR

INSURANCE

Tips for Applying for Insurance

1. Work together with your agent to help the carriers understand what you do

2. Emphasize your good work & controls 3. Provide time for underwriting review4. Complete the application5. Attach all supporting information6. Provide truthful information7. Be open to alternatives

Summary• Insurance protects your organization• Know your coverage needs and exposures• Utilize the services of an Insurance Agent

or Broker• Familiarize yourself with your policy• Provide truthful and detailed information

about your organization to obtain the most effective coverage

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Thank you for participating!