1

Insurance Secrets for Nonprofits

What you must know before purchasing your organization’s liability insurance

Presenter:Peter Andrew, CEO,

Council Services Plus272 Broadway

Albany, NY 12204877.501.4277, Ext 125

www.councilservicesplus.com

2

Liability...

When an individual (or organization) is legally responsible for damages due to negligence.

- Direct Liability- Entity is directly responsible for the failure to prevent harm

- Vicarious Liability- Entity is liable for the actions of its agents

3

3 types of liability discussed today

• Liability for bodily injury or property damage

• Liability NOT resulting in BI or PD

• Liability for rendering or failure to render a professional service

4

Liability for bodily injury or property damage

• Liability Insurance Products– General Liability (GL) & Property

Coverage

• Bodily Injury & Property Damage

• Personal & Advertising Injury

• Medical Payments

5

Liability for bodily injury or property damage

– Certificates of Insurance Vs. Additional Insureds

• What’s the difference?

• Why are they requested?

• Keeping up with them.

6

Liability for bodily injury or property damage

• Special Events Coverage– Can be covered within a GL policy or

separately

• Hired & Non-Owned Auto– Coverage for Entity– Coverage for Individuals

7

Liability NOT resulting in BI or PD

• Directors & Officers Liability Insurance (D&O)– Is it required or necessary? – What’s covered

• Board Management decisions

• Employment Practices

– Exclusions

8

Liability for rendering or failure to render a professional service

• Professional Liability– Health Care & Mental Health Agencies

• Malpractice

– Counseling, Referral & Educational Agencies• Errors & Omissions (E&O)

• Miscellaneous Professional Liability

9

Other Types of Liability Coverage

• Crime Insurance (Employee Dishonesty)

• Sexual Misconduct (Abuse/Molestation)

• Host Liquor Liability

• Commercial Auto

• Fiduciary Liability

• Benefits Liability

• Excess and Umbrella Coverage

10

Current Insurance Market for Nonprofit Organizations

• Current Insurance Market

• Sources for Insurance for Nonprofits– Social Service Agency Package

Programs/Specialty Companies– Regional/National Nonprofit Insurance

Programs– Agents/Brokers specializing in nonprofit

insurance programs

11

When do you shop?

• Conditional Renewal and Non-renewal Notices– 60 Days in Advance– Be Proactive and Deliberate

• Set a consistent parameter– Price increase of more than 10%– Inability of carrier to offer proper coverage– Poor service

– Distinguish between Broker issues and Carrier issues

12

Evaluating Your Current Risk Management Program

• Evaluate current insurance coverage with current broker/insurer

• Review areas of desired improvement in coverage with Board Committee

• Evaluate current Risk Management efforts

• Additional Considerations– Will you need board or committee approval?– What are your contractual obligations?

13

Selecting Brokers and Insurers

• Two or three good brokers should be able to access five or six insurance companies– First send a letter/packet to express interest

• What to include?

• Insurance company procedures– 1st come, 1st served– broker of record letter– market assignments

14

Underwriting information

– Application– Prior claims information

• AKA Loss Runs– 3-5 years

– Annual report/brochures– Financial statements– Copies of any policies that could pertain

• Personnel Policy

• By-laws

15

Implementing New Insurance Programs

• Insurance binders

• Payment plans

• Certificates of insurance

• Review insurance policies

• Claims handling

• Risk management services

Thank you!!