As a follow-up on last week’s post—and in case you haven’t yet contacted your insurance provider to review your coverage—we offer the following scenarios. Just a reminder that non-profit organizations really do need proper insurance coverage for your volunteers!

What’s the worst that could happen?

• A van accident. Here’s the scenario: one of your most loyal, long-term volunteers is driving clients to the zoo in her mini van. She is a careful, accident-free driver. Still, she is hit from behind at a stop light by an under-insured driver. Two clients and the volunteer suffer injuries. After checking on the status of everyone in the van, your first thought is, “Will the NPO be sued?” Of course you’re concerned about litigation. That’s why you have insurance coverage for all volunteers, volunteer property, liability and un- or under-insured drivers. You also encourage volunteers to check with their insurance companies about additional coverage on their auto policies—for extra protection. And this one did. You’ll sleep tonight, knowing that insurance will cover everything.
• Charges of sexual misconduct against a volunteer. This is one of the most frightening scenarios a volunteer manager can face. That’s why two types of prevention are important to protect your NPO against it. First, proper volunteer screening is absolutely necessary. When you conduct reasonable background checks on all volunteers, the NPO and its board are less likely to be found liable for damages due to a volunteer’s misconduct. Second, liability coverage is required to cover instances that cannot be predicted. Whether or not the volunteer is guilty of a crime, putting your NPO at risk of financial loss is unacceptable. But be careful—be sure that your liability coverage does not exclude this type of behavior. You don’t want your organization and its directors to be personally liable for negligence!

Insurance regulations vary by state. Check with your insurance provider about whether or not your organization needs any additional coverage. You’ll be glad you’re insured when and if you ever need to be!

Risk management is an important responsibility of non-profit organization (NPO) directors. It can range from avoiding financial risk through proper planning and investing, screening potential volunteers to keep staff and served clientele safe, and holding sufficient insurance coverage.

While most NPO executives will consult their professional insurance provider for details on their particular needs, here we offer some general information on what to consider to be safe—and smart—about insurance coverage.

Insurance is not perfect and won’t cover every situation a charitable organization is likely to run into. It can also be expensive—especially when an overzealous salesperson recommends coverage you either don’t need or don’t want. But insurance is useful and in most cases, necessary to protect an organization from financial risk.

General Liability Insurance: This usually covers a long list of claims that could be filed against an NPO. Check for lists of exclusions and if necessary, purchase separate riders or endorsements that will cover items your organization’s activities warrant.

Auto Liability Insurance: If your NPO’s volunteers drive on behalf of the organization in either their own or company-owned vehicles, you’ll need insurance to cover them. Generally, auto accidents are not covered by a general liability policy, which offers coverage for the driver, property damage, the vehicle and injuries to others, as well as the possibility that the other motorist involved in the incident is uninsured.

Casualty Insurance: In generally, casualty insurance covers damage done by third parties, vandals, floods, fires,earthquakes and building failures. Consider whether volunteers use their own property, such as laptops and tools, in the course of their work for your organization.

Professional Liability Insurance: This coverage could be needed in cases of claims made by clients against professional or licensed services.

Director’s and Officer’s Insurance: In cases where a volunteer director’s or officer’s actions cause a claim to be filed against the organization, this coverage would be very valuable. It can also help attract board members, since they’ll have the peace of mind of knowing theiy won’t be personally responsible.

Again, insurance regulations vary by state. Checking with your insurance provider about whether or not your organization needs the above coverages is something you should consider doing sooner, rather than later—to reduce the risk of loss to your non-profit organization.