We need insurance for our non-profit organization.

January 19, 2005 8:26 PM

Does anyone have experience with non-profit liability insurance policies? We're looking at a general liability policy for our small non-profit, plus liability coverage for individual board members.
posted by F Mackenzie to Work & Money (5 answers total)

I do -- up until December 31, I was a licensed Virginia surplus lines property and casualty agent. Without a specific question, I'm not sure of what to answer. Um... It's cheap -- maybe $750/year, or thereabouts. (You can get it for less, but cheap insurance is like a cheap parachute.) I like U.S. Liability's coverage, but there are lots of other markets. Don't bother with the fiduciary liability coverage -- you have no ARISA exposure, in all likelihood, so skip it.

That's all I've got, without a question.
posted by waldo at 7:52 AM on January 20, 2005

Check your state's statutes for liability of nonprofits. You may not need some coverage. Our state has a recreational liability statute on the books that would protect the landowners we deal with, but it has not stood up in court. So you should check with a lawyer about the history of the statutes.

D&O, or director's and officer's coverage was offered to us for under $1000 per year.

We had no luck getting other kinds of insurance, although it looked like we might be able to get something in the $8-10K range.
We build canoe trails, which involves working out of a boat. The underwriters didn't like it. Our board members included two judges, who wanted unbelievable amounts of protection. We decided to skip it, and lost some board members but gained a few, too.

They wanted a general liability policy, plus two workman's compensation policies to cover not only myself, but them in case I were killed and my survivors sued them.

Be sure what you're doing is covered; like waldo said, some insurance is cheaper, but not much is covered.

Most municipalities around here want some kind of liability coverage when we're doing grant-related work. We've done this by hiring ourselves through a temp agency, which comes with liability coverage. In your case, I see you have used Americorps volunteers. Maybe there are other organizations you can partner with that have coverage.
posted by atchafalaya at 8:20 AM on January 20, 2005

I've never had to get board insurance myself, but I have been covered by those policies.

I can tell you the importance of it though. A friend was a co-director of a small non-profit. The other co-director made some advances toward one of the clients. The client sued the non-profit and all of the board members. The insurance co. settled with the client. Had they not had insurance, they would have been screwed.
posted by Juicylicious at 8:23 AM on January 20, 2005

Response by poster: Thanks for the feedback thus far.

One of our board members suggested we individually get liability coverage through our own means rather than a single D&O policy, which doesn't strike me as a good idea.
posted by F Mackenzie at 8:45 AM on January 20, 2005

You're right, F Mackenzie, that's a terrible idea. It would cost you the same amount per person as it would to cover the whole board. (Such as $1,000 to cover the board, or $8,000 to cover all 8 members, if they go out on their own.) If it's a financial thing, have the board members chip in 1/8 of the cost (or whatever) for the premium or, better yet, get the one rich guy to pay the premium, since he's got the most to lose. :)

As a rule, I won't serve on boards that don't have D&O coverage. I've served on a half dozen boards over the years, and turned down a couple that haven't had D&O. It's not worth the risk.
posted by waldo at 9:30 AM on January 20, 2005