Nonprofit organizations provide essential social services that benefit the community and their members. However, even if your organization doesn’t sell a product or generate profit, there are still a number of potential risks that can affect your employees, assets, volunteers, directors and officers, and most importantly, your mission.
Countless claims can be brought against your nonprofit. For example, a volunteer could sue your directors and officers for discrimination or harassment, leading to costly litigation. Additionally, should an individual injure themselves at one of your events or on your property, they could bring a claim against you. The list below provides an overview of these risks and more—helping you identify potential blind spots in your risk management and insurance programs.
Adoption | Affordable housing | Animals (therapeutic, shelter, rescue) | Arts and cultural groups | Big Brothers, Big Sisters | Booster Clubs | Boys & Girls Clubs | CASAs (Court Appointed Special Advocates) | Charter schools | Community Action Programs (CAPs) | Counseling and crisis support education | Daycare (child and adult programs) | Developmentally disabled senior and youth services and programs | Drug and alcohol recovery programs | Environmental organizations | Fiscal sponsors | Foodbanks | Foster family agencies | Foundations | Goodwills | Group homes | Home health agencies | Hospices | Information and referral services | Mentoring programs | PTAs | Residential programs | Senior Services | Shelters (housing) | Theater groups | Transportation (senior & accessibility programs) | Vocational training | YMCAs | Youth programs (after school, tutoring, etc.)
With each decision they make on behalf of your organization, directors and officers (D&O) of nonprofits assume a level of risk. In the event of a claim, nonprofit leaders can suffer damage to their reputation and personal finances. What’s more, D&O claims can come from a variety of sources, including employees, clients, volunteers, regulators and donors.
Nonprofits depend heavily on the kindness of volunteers to successfully carry out their mission. However, should one of these individuals injure themselves while serving your organization, you could be held liable for any damages. What’s more, insurance coverage for volunteers isn’t always available under general liability policies. Accordingly, many nonprofits choose to insure their volunteers under a stand-alone insurance policy.
Nonprofits are at risk for allegations of sexual assault due to the unique characteristics of these organizations (e.g., frequent, unsupervised interactions between children and trusted adults). Whether legitimate or not, sexual abuse allegations involving employees, volunteers, or directors and officers can have catastrophic consequences for your group or organization.
Property—including your building, fixtures, office equipment, data, signage and similar items—play a key role for your organization. And, in the event of a loss caused by fires, theft, vehicles or vandalism, your nonprofit can suffer major financial damages. What’s more, a single incident can affect multiple aspects of your property, compounding costs and downtime for your organization. Add an answer to this item.
If your nonprofit provides counseling, training, or other kinds of instruction or services, professional liability exposures can be substantial. When providing these services, any errors and omissions—whether intentional or not—can create serious legal concerns. Specifically, should your organization, board of directors, employees or volunteers provide advice or make decisions that harm a third party, your nonprofit could face legal action.
As more and more nonprofits use databases to keep records of members, clients, volunteers and donations, cyber exposures will continue to increase. In fact, nonprofits are a common target for cybercriminals, as these organizations often process high-volume checks and credit/debit card information when taking donations. In addition, volunteers and employees who are improperly trained on computer and data safety could leave your organization exposed to ransomware, viruses, phishing scams and malware.