3 tips for effectively managing risk in the Non-Profit Industry

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People go in to the non profit industry for a wide array of reasons. For most people, that reason has something to do with serving their community. Many people in the non profit Industry do not anticipate having to manage risk, but how effectively their organization manages risk will contribute immensely to the success or failure of the organization. Some of the aspects of managing risk include:  developing safety programs, writing liability waiver forms, designing a return-to-work program for injured workers or purchasing workers’ compensation insurance.  In order to effectively manage risk, here are three tips every Non Profit Professional should consider when determining how to manage the risks your organization faces.

 

Have an effective safety program in place.

Having an effective safety program in place is essential for all non-profit organizations. First and foremost, this is simply the right thing to do.  It is the right thing to do for your employees, for your volunteers and for your organization as a whole. The success of the safety program starts with the leaders of the organization. If the leaders of your organization make it clear that you value safety, the employees and volunteers will value safety as well.  What an effective safety program looks like will differ depending on the scope and mission of your organization. A safety program for local soup kitchen will be dramatically different than an NGO that distributes medicine across several different countries.  For that reason, it is important to invite a risk management professional to sit on your board of directors.  If you do not know someone in this field you can consult with your insurance agent.  They typically have generic programs in place for many different industries.

 

Deciding when and if your organization needs to purchase insurance?

For a small or recently founded organization, you may be able to do without insurance for a short period of time. This is not something to take lightly.  No matter how little money your organization has, not securing proper insurance can lead to your organizations failure if an accident does happen without proper coverage.  Eventually there will come a time when your organization will need coverage. The state you are located in will determine when you are required by law to purchase some coverages. Workers’ compensation insurance is usually the first coverage you will be required to purchase. This policy covers the risk of bodily injury to your employees.  General liability insurance covers bodily injury and property damage done to third parties. These third parties may be the people you serve or anyone who comes in contact with your organization. These two policies are typically the first policies a non profit will consider and they are the bare minimum coverage.  As your organization grows these two policies may not fully cover your business from all risks. Consulting with an insurance professional whom you trust is important at this stage in your risk management process. Asking someone who works in insurance to volunteer with your organization or to sit on your board is a good idea.

 

Have a return-to-work program in place for injured employees.

Developing an effective return-to-work program is something that can be a work in progress. Ideally your safety program works and you do not have many injuries. Even if you only have the occasional minor injury, it is best practice for your organization to have a plan for getting an injured worker back to work as soon as possible.  The quicker they get back on the job the more likely they are to return to regular work and the mission of your organization.  Some common jobs for injured workers include basic office work like stuffing envelopes, answering the phone or writing thank you letters to donors. Getting people back on the job quickly is important because people who work in this industry frequently have a special relationship with the work they do. Many of them want to be a part of something greater than themselves. This is especially true with the millennial generation. When these people are injured and not able to work, part of their life is taken from them. The longer it is not a part of their life, the more likely they are to not come back to work at all. This is when the cost of a claim can become the greatest and is when you can expect to see an increase in your insurance premium. Having an effective return-to-work program can help these employees get back on the job, control the cost of your workers’ compensation claim and continue the mission of your organization.

3 ways to managing risk in the Non-Profit Industry

There are many reasons why people go in to the non-profit industry.  Some people want to fight poverty, some work closely with a church and others might be dedicated to fighting a disease.  One common theme among people who work in the non profit industry is that they want to be a part of something greater than themselves.  One thing many people in this industry do not anticipate is having to manage risk, but this can be one aspect of their job that can ultimately determine the success or failure of the organization.

Find the best answers to your Non Profit Insurance questions at MyInsuranceQuestion.com

Many people who go in to this sector do not anticipate having to manage risk or buy insurance. They probably do not anticipate their jobs causing them to have to worry about things like a return-to-work program, workers’ compensation benefits or general liability insurance. As a non-profit professional, how effectively you handle these aspects of your organization will contribute immensely to the success or failure of your organization. For that reason we have created three main tips for managing risk within your non-profit agency.

 

Have an effective safety program in place.

Having an effective non-profit safety program in place is essential for all non-profit organizations.  Most non-profits depend on people volunteering their precious time and money to the organization. The last thing you want to happen is for a volunteer to be injured while helping your organization. A safety program can prevent this from happening.

First and foremost, reporting and documenting injuries needs to be a part of your company culture. It should start with the first training all employees get during the on-boarding process. Employees need to be well aware of how to inform volunteers how to properly do their job in a safe manner.  This can go hand in hand with your business’s safety program and your business’s safe driving program.  Another thing to keep in mind is that how safe your organization takes safety starts with you and your key employees.  If you stress safety as the professional, your employees and volunteers will also value this safety program.

Non Profit Insurance Answers

When should a new or small non-profit decide to purchase insurance?

For a new non profit, insurance may not be necessary at first, but it is not something to be taken lightly. No matter what the financial situation is of an organization, the quickest way to fail as a non-profit is to not secure adequate insurance.  Your state laws will determine when you must purchase coverage. Workers’ comp and general liability are typically the first two policies you will find a need for.  Workers comp protects your employees and general liability protects your organization from damages to third parties.   Even if you are fairly sure you have proper coverage or do not need coverage at this time, consulting with an insurance professional with whom you trust is a very wise decision.  If you know someone who works in risk management or insurance, it might be a good idea to ask them to sit on your board of directors.

Have a return-to-work program in place for injured employees.

Operating an effective return-to-work program is another aspect that will contribute immensely to the success or failure of your organization.  Ideally you will never have a need for a return to work program because none of your employees will ever be injured on the job. But as you very well know, we do not live in an ideal world. For that reason it is crucial for you to prepare for the day when you do have an inured employee. If you are prepared, you will be able to get those employees back on the job quickly and control the cost to your organization.   Any work you have to get the injured employee involved in the organization will benefit the injured employee and your organization in the long run.  Getting people back on the job quickly is important because the quicker they are back on the job the more likely they are to not become an injured worker long-term or permanently.

5 coverages every Non-profit business should have.

The Non-profit Industry is a very wide industry that encompasses a large amount of different types of organizations.  Some businesses simply operate a soup kitchen and only offer meals to those in need. Others offer medical coverage and still others offer construction services for those in need of housing. Each type of mission brings its own unique risks.  That is why it is important for non-profit managers to partner with insurance agents who have knowledge in many different industries and agents who partner with a large amount of carriers. This can help the agent find the non-profit quotes from numerous carriers and will allow them to get your nonprofit more complete coverage and usually at lower rates on premium.

non-profit workers compensation insuranceA lot of insurance carriers have restricted coverage for non-profit and charitable organizations due to a large amount of historical claims and their potential exposure from volunteers serving these organizations. A few carriers have taken a different approach to non-profits and created programs designed specifically to the unique needs of these businesses.  Below is a list of six coverages most non-profits will need.

General Liability

General Liability Insurance covers you and your organization from damages done to third parties as a result of the actions of your organization. These can be bodily injury claims and property damage to anyone who is not you or your employee.

Workers’ Compensation

non-profit-workers-compWorkers’ comp differs from General Liability because it protects your business from being liable to injuries that occur to your employees. It is frequently referred to as the ‘Exclusive Remedy”. That is because it will pay for employee medical costs, disabilities, and lost wages related to on-the-job injuries and accidents. Your organization will benefit from this policy by having the security that you will not be sued by your employees for accidents that occur as a part of your normal operations.

Commercial Auto

Commercial auto insurance for your vehicles is an important aspect of any business insurance program. This coverage provides protection against physical damage and bodily injury resulting from car accidents involving you or your employees. Most coverages also provide some protection from theft and vandalism.  Your organization does not have to own any vehicles to need some form of commercial auto coverage. For example, one of the most often overlooked business insurance coverage is Hired and Non-Owned Auto. Almost every business will occasionally utilize a personal, or non-owned vehicle for work related tasks. For example, your organization has an office staff member make trips to the bank to make a deposit of donations. Another example might be sending an employee to the restaurant to pick up food for volunteers. Every time someone uses a vehicle not owned by the non-profit to perform a business related function, the organization is at risk.

Cyber Liability

Most non-profit organizations think they are not at risk of a data breach. Many may think, I am a small organization with not much money, why would anyone bother to hack my organization. That is exactly what two small business owners thought when two of the largest data breaches in history occurred. Both the Home Depot and Target data breaches occurred by hackers first accessing a small business and then that small business had a vendor partnership with the larger business and that is how the hackers gained access.  If you store any information about donors or have a partnership with another organization, you could be at risk of a breach. Most cyber insurance plans can be added to a (BOP) at minimal cost to your organization.

Commercial Property

business-property-valuation-for-commercial-insuranceCommercial property is needed if you own property no matter the size of the premise. This will cover all property, including things like desks, chairs and anything physically attached to the building (i.e. shelvings, cabinets, etc.). Property coverage does not cover some specialized equipment like printers, computers or other office equipment. Coverage for this type of property would be covered under and Inland Marine Insurance Policy. These policies can easily be paired together under what is called a Business Owners Package (BOP). It is usually a good idea to ask your agent to quote a BOP because carriers are more likely to give your organization a discount on premium if you are carrying more than one coverage from them.

Owners and Officer’s

Owners and officer’s coverage might be the most important and frequently overlooked coverage for most non-profit organizations. The people who sit on your board are usually giving their time and expertise for free. Most just believe in you or believe in the mission of the organization. The last thing you want is for something to go wrong with your organization and them be liable for the actions of the organization.

liability-insurance-for-small-businesses Owners and Officers Coverage is for defense costs and damages (awards and settlements) arising out of wrongful act allegations and lawsuits brought against an organization’s board of directors and/or officers. Securing this coverage allows your officers to sit on your board and comfortably know they are not going to be liable for the actions of the organization.