Insurance for Nonprofit Organizations

Nonprofit organizations require various types of insurance coverage to protect their operations, assets, employees, and volunteers. So, in this article, we will elaborate on the insurance for nonprofit organizations. Here are some common insurance policies that nonprofits should consider, along with examples of companies that offer such insurance:

  1. General Liability Insurance:
  • Protects against bodily harm, property damage, and personal injury claims made by third parties.
  • Companies: Philadelphia Insurance Companies, Nationwide, CNA, Travelers.
  1. Directors and Officers (D&O) Liability Insurance:
  • Protects the organization’s directors and officers from claims related to their management decisions and actions.
  • Companies: Chubb, The Hartford, AIG, Liberty Mutual.
  1. Professional Liability Insurance (Errors & Omissions):
  • Covers claims related to services provided by the nonprofit, such as counseling, consulting, or professional advice.
  • Companies: Hiscox, CNA, Travelers, Philadelphia Insurance Companies.
  1. Employee Practices Liability Insurance:
  • Protects against lawsuits about unfair termination, harassment, and discriminatory activities at work.
  • Companies: Travelers, Chubb, AIG, The Hartford.
  1. Workers’ Compensation Insurance
  • Provides benefits to employees who suffer work-related injuries or illnesses (required by law in most states).
  • Companies: Travelers, AmTrust, Employers Insurance Company of Nevada (EICN), Liberty Mutual.
  1. Commercial Property Insurance
  • The physical assets of the organization are protected from hazards like fire, theft, and natural catastrophes by insurance, including buildings, machinery, and inventory.
  • Companies: Nationwide, Philadelphia Insurance Companies, Chubb, Liberty Mutual.
  1. Cyber Liability Insurance:
  • Protects against risks related to data breaches, cyber-attacks, and other cyber-related incidents.
  • Companies: Chubb, AIG, Beazley, Coalition.
  1. Volunteer Accident Insurance:
  • Provides medical and accidental death benefits for volunteers injured while performing duties for the nonprofit.
  • Companies: Philadelphia Insurance Companies, Nationwide, Markel.
  1. Special Event Insurance:
  • Covers risks associated with hosting events, such as festivals, fundraisers, or conferences.
  • Companies: Travelers, Philadelphia Insurance Companies, K&K Insurance Group.

Nonprofits should work with an insurance broker or agent who specializes in the nonprofit sector to ensure they have the appropriate coverage for their specific needs and exposures.

Why Do We Need Insurance for Non-Profit Organizations

Non-profit organizations need insurance for several important reasons:

  1. Protection against liability claims
  • Non-profits face various liability risks, such as claims of negligence, misconduct, or injuries sustained by visitors, volunteers, or employees. General liability insurance and professional liability insurance can protect the organization from costly lawsuits and settlements resulting from such claims.
  1. Safeguarding assets
  • Non-profits often own or lease physical assets like buildings, equipment, vehicles, and inventory. Commercial property insurance can protect these assets against risks like fire, theft, and natural disasters, ensuring the continuity of operations and minimizing financial losses.
  1. Directors and officers’ protection
  • Directors and officers (D&O) liability insurance provides coverage for claims related to management decisions and actions taken by the organization’s leaders. This coverage can protect the personal assets of directors and officers and ensure the non-profit can attract and retain qualified individuals for these roles.
  1. Employment practices protection
  • Non-profits, like any employer, can face claims related to employment practices, such as discrimination, harassment, or wrongful termination. Employment practices liability insurance can provide coverage for legal expenses and settlements arising from such claims.
  1. Volunteer protection
  • Many non-profits rely heavily on volunteers to carry out their mission. Volunteer accident insurance can provide medical and accidental death benefits for volunteers who are injured while performing duties for the organization, helping to protect both the volunteers and the non-profit.
  1. Cyber risk protection
  • Non-profits often handle sensitive data, such as donor information and employee records. Cyber liability insurance can help cover the costs associated with data breaches, cyber-attacks, and other cyber-related incidents, including legal fees, notification expenses, and credit monitoring services.
  1. Event liability coverage
  • Non-profits frequently organize events, fundraisers, or conferences. Special event insurance can provide liability coverage for these activities, protecting the organization from claims related to property damage, personal injury, or other incidents that may occur during the event.
  1. Continuity of operations
  • Insurance policies like business interruption insurance can help non-profits continue their operations and provide services in the event of a covered loss or disruption, such as a fire or natural disaster, by providing income replacement and covering ongoing expenses.


It’s worth noting that many insurance companies offer tailored packages or bundled policies specifically designed for nonprofit organizations, which can provide comprehensive coverage at a more affordable cost.

By securing appropriate insurance coverage, non-profit organizations can manage risks, protect their assets and personnel, and focus on their mission and goals without the constant worry of potential financial losses or legal liabilities.

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