Nonprofit, Community & Public Entity Insurance

Organizations that exist to serve people rather than sell to them, and the exposures that come with volunteers, boards and public access.

Who It Is For

Organizations that answer to a mission, a membership or a community.

No two of these organizations look alike, and the coverage list changes with what the organization does rather than with how large it is. A few questions decide most of it: do you deal with members of the public who are at risk of injury, do you transport people who are not staff, and does anyone rely on the help or advice you give.

Organizations that work with children, the elderly or people with disabilities.
Organizations that depend on volunteers as well as paid staff.
Organizations governed by a board of directors or trustees whose members can be named personally.
Organizations that transport members, clients or the public.
Organizations that hold public events and fundraisers.
Public entities responsible for utilities, roads, buildings or emergency response.

Community organization served by an Oxford Risk nonprofit insurance program

Industry Overview

A nonprofit is still a business, and the reason it exists is exactly what creates its hardest exposures.

Mission-driven and public organizations carry every risk an ordinary business carries: a building, equipment, employees, vehicles, records and a payroll. On top of that they open their doors to the public, run on volunteers, answer to a board, and often serve people who cannot fully protect themselves.

That combination is what separates this insurance from a standard business policy. Premiums for nonprofits are often lower than for comparable commercial operations, but the coverage list is longer, not shorter, and the lines most often left off are the ones that respond when something goes badly wrong.

Major Risks

The exposures this sector carries that a commercial policy was not written for.

They tend to arrive as an allegation rather than as a fire.

Allegations of abuse and molestation must be defended either way. Any organization that works closely with children, the elderly or other at-risk populations is open to this claim, and the claim has to be defended whether or not it has merit.
The board is personally exposed. Directors, officers and trustees can be named individually when the organization is accused of mishandled funds, misleading statements, breach of duty, or errors and omissions.
Volunteers are not employees, and the policy has to say what they are. A volunteer who is hurt, who drives a personal vehicle on the organization's behalf, or who is named in a claim is only covered if the policy reaches them. Departments and agencies that run on volunteers need them addressed directly.
You move people who are not on your payroll. Transporting clients, members, students or the public shifts the auto exposure well past a commuter risk. It reaches owned vans and buses, vehicles rented for a single event, and the personal cars that staff and volunteers use on the organization's behalf.
The help you give can be the source of the claim. People can be injured, or incur costs, because of a shortcoming in the advice, counseling, instruction or care your organization provided. That is a professional exposure, and a general liability policy is not where it is answered.
Employment claims arrive regardless of size. Harassment, discrimination, improper hiring and wrongful termination claims are brought against small organizations as readily as large ones, and the cost of defending one comes out of program funds.

Most of these organizations need a general liability and property base, then three or four specialty lines that a standard business policy leaves off.

General liability. The premises and public exposure, for injury to a visitor or damage to someone else's property. The more people who come through the door, the more this limit matters.
Commercial property. The building and its contents, owned or leased, against fire, explosion, burst pipes, storm, theft and vandalism. Flood and earthquake are written separately and have to be asked for.
Directors and officers liability. Protection for the governing body when the organization is accused of wrongdoing, typically extending to directors, officers, trustees, employees and volunteers.
Abuse and molestation liability. Defense costs, court costs and settlements for allegations of physical, sexual or mental abuse. Essential wherever the organization works with children or at-risk adults.
Employment practice liability. Defense and damages for harassment, discrimination, improper hiring and wrongful termination claims brought by staff or applicants.
Professional liability. For allegations of inaccurate advice, negligence or mistakes in the services the organization provides. On a school this appears as educators legal liability; on a congregation, as ministers and pastors liability.
Workers' compensation. Injury and illness on the job, for paid staff and, where the policy is written to reach them, for volunteers. Requirements vary by locale.
Business auto, plus hired and non-owned auto. Owned vehicles, and the vehicles you do not own: staff and volunteer personal cars used on the organization's behalf, and vehicles rented for a specific event.
Cyber liability, crime and employee dishonesty. Donor, client and student records are worth stealing, and funds handled by a small staff or a volunteer treasurer are worth protecting. These are two different covers for two different losses.
Commercial umbrella. Limits above the general liability and auto policies, for the claim that runs past the primary limit.

Churches and houses of worship

A house of worship has to be insured as a building, a community center, an employer and, in some cases, a religious leader's home. The property side reaches items an ordinary commercial policy is not built for: stained glass, steeples, the personal property of clergy, and the cost of bringing a damaged building up to current local ordinances while making repairs. On the liability side, abuse and molestation coverage is central rather than optional, because congregations run youth programs and child care, and religious freedom coverage responds to claims arising from the congregation's beliefs and practices. Coverage can also be extended to congregation events, mission trip travel, and ministers and pastors liability.

Municipalities, townships and public authorities

A municipality is several unlike operations under one name: administrative offices, school buildings, public works depots, equipment yards and utilities, each with different occupants, machinery and materials, and therefore a different risk. The liability is unlike a business's as well. Public officials liability answers for decisions made in an official capacity, law enforcement liability for the conduct of police and first responders, and sewer authority liability for the systems residents depend on. The workforce runs from clerical staff to sworn officers, which makes workers' compensation, employment practice liability and abuse and molestation coverage all load-bearing, and earthquake and flood are written separately from the property program.

Child care centers and daycares

Young children fall and get hurt more readily than adults or school-age children, so student accident coverage sits alongside liability rather than being replaced by it. The insured property is unusual too: outdoor play structures, toys and playground equipment are part of what the policy has to cover, whether the center runs from a commercial building or the owner's home. Abuse and molestation liability is fundamental for any operation caring for a young population.

Schools and educational facilities

A school has to insure its faculty, its governing body and its ability to keep teaching. Claims of discrimination, harassment, wrongful termination and negligence can name the school together with its officers, directors, board members and faculty, which is what educators legal liability is written for. The other distinctive need is continuity: if the building cannot be used, the coverage that matters pays to secure an alternative location so classes go on, not simply to repair the structure. Athletics and student activities add a participant injury exposure on top of the ordinary premises risk.

Social service agencies

Children's services, senior services, mental health programs, counseling, food banks, emergency relief, public housing and youth services all share one exposure: sustained close contact with people who cannot always protect themselves, which puts abuse and molestation liability at the center of the program. Clients are often transported in agency vehicles or in staff and volunteer personal cars, and workplace violence coverage is worth considering: it can reach public relations and security consultants, payments to victims and survivors, and the income lost while the facility cannot open.

Fraternal organizations, lodges and clubs

Lodges, halls, social clubs, alumni and civic associations, community memberships and veterans organizations are premises risks first, and the exposure rises with every visitor through the door whether the building is owned or leased. Directors and officers liability is the line most often overlooked. Events and fundraisers are the other half of it: alcohol served brings liquor liability, an outside vendor or a lost date brings event cancellation, and off-site activity has to be written in rather than assumed.

Volunteer and municipal fire departments

A department's portable equipment does its work in the worst conditions available, so it belongs on an inland marine form that follows it to the incident rather than on a building schedule. The fleet runs from ladder trucks and engines down to brush trucks and SUVs, and it is driven into danger on purpose, which is more than standard fleet coverage contemplates. A department with active volunteers needs them addressed by name for medical expenses, indemnity for loss of life or injury, and income protection for disability. Environmental impairment coverage is the one departments rarely expect: pollutants arise from the emergency response itself as well as from equipment washdowns and training.

Is a nonprofit cheaper to insure than a business?

Often, yes. Premiums for nonprofits are frequently lower than for comparable commercial operations. What the policy costs still turns on location, the size of the organization, how many employees and workers it has, and what kind of work it does, and the coverage list is usually longer than a commercial one because of the specialty lines this sector needs.

Are our volunteers covered?

Only if the policy is written to reach them, which is why it is worth asking directly. Directors and officers coverage commonly extends to volunteers along with directors, officers, trustees and employees. Injury to a volunteer, and a volunteer driving a personal vehicle on the organization's behalf, are separate questions answered by workers' compensation or a volunteer benefit arrangement and by hired and non-owned auto.

Why is abuse and molestation coverage written separately?

Because the claim behaves differently from an ordinary injury claim. It has to be defended whether or not it has merit, defense costs alone can be substantial, and the coverage is structured to respond to court costs, defense and settlements. Any organization working with children, the elderly or other at-risk populations should treat it as a core line rather than an endorsement to consider later.

Does our policy protect board members personally?

That is what directors and officers liability is for. A general liability policy responds to injury and property damage, not to allegations that the governing body mishandled funds, made misleading statements or breached a duty. Check how the policy separates the organization itself from the personal liability of its directors, because the two are not the same exposure.

We hold public events and fundraisers. Does the regular policy cover them?

Not always, and not off-site. Alcohol at an event raises liquor liability, an event that cannot be held raises event cancellation, and an event held somewhere other than your own property may need liability extended to that location. It is worth confirming before the invitations go out rather than after.

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Oxford Risk LLC is an independent agency. We represent you rather than a single carrier, which means we can place your coverage with the company whose appetite actually fits your risk. Tell us what you need to protect and an advisor will take it from there.

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