Matt Hands, VP, Insurance and MoneySense
Non-profit insurance is a type of business insurance package designed to protect your organization financially from the unique risks of its day-to-day operations. Whether a child injures themselves at your charity event or a director mismanages donor funds, having the right non-profit insurance package can help pay for legal fees and compensatory damages.
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Any non-profit (NPO) should consider purchasing business insurance to protect the organization from potential claims that could lead to financial trouble.
This is especially important if your NPO:
- Works with third parties (e.g. volunteers, employees, the public)
- Own or rents office space
- Hosts off-site events
- Has a board or advisory committee
Below are some examples of non-profit organizations that could benefit from a business insurance package:
- Community centres
- Community services
- Research institutions
Your board of directors are named in a lawsuit for mismanaging government funds.
At a charity fundraising event, a donor slips on your stairs and injures themselves.
A participant suffers injuries in a senior fitness class under the direction of your instructor.
General liability insurance
Professional liability insurance (E&O)
Commercial property insurance (contents insurance)
Directors and officers liability insurance (D&O)
Cybersecurity liability insurance
Event liability insurance
How much does non-profit insurance cost?
The cost of non-profit insurance depends on many factors but expect to pay between $500-$1,000 per year. Get a non-profit insurance quote to find out how much it may cost you.start my quote
Type of non-profit
The type of non-profit you run plays an immense role in the cost of your insurance, as different organizations bring different levels of risk. The more likely your non-profit is to make a claim, the higher your insurance will be. For instance, if your charity runs public-wide events for fundraising every week, expect to pay a higher premium than a small-scale foundation.
Number of employees and operational size
The more staff you have on your team and the larger your operations, the more you’ll be paying for your non-profit business insurance. Having a larger organization increases your outreach, making your NPO more susceptible to a claim – any staff member can make a mistake, and any third-party your business encounters (e.g. volunteer, donor, client) can hold you liable.
If your organization operates in a place that needs to be insured, such as an office or recreation center, the location will play a big role in the cost of your insurance. Non-profits situated in an area prone to crime or natural disasters (e.g. flood, earthquakes), will cost more to insure because of the increased risk of a claim.
Bringing more experience to your NPO’s industry can lower your insurance premium because it establishes your reliability to insurers. Having a decade of experience running a successful health organization shows insurers you know what you’re doing. On the other hand, if you’ve never planned a fundraising event or handled donation funds before, protecting your non-profit with insurance will be more expensive.
Although your business may be not-for-profit, the amount of revenue you bring in still factors into your insurance premium. The higher your revenues, the higher your business insurance will be because third parties can ask for more in damages, knowing your NPO is well-off financially.
Business insurance history
Having a clean non-profit insurance history can show insurers you’re less likely to make a claim in the future, lowering your insurance premium. On the other hand, if your non-profit has been held liable several times (e.g. for giving harmful advice, for a director’s negligence), your cost for insurance will increase.
Does non-profit insurance cover claims involving volunteers?
What are some non-profit directors and officers insurance claims examples?
How do I get non-profit insurance in Canada?
Matt Hands, Business Director of Insurance
With 6+ years of experience at Ratehub.ca, Matt’s focus has been on growing its newest business unit, Insurance. He is a thought leader and a valuable resource to respected publications across Canada. read full bio
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