Commercial General Liability Insurance (CGL)
What is it? CGL Protects your organization and its representatives against claims and/or lawsuits that arise and alleged to have caused bodily injury, personal injury or property damage as the result of the negligent actions or operations of the organization. Bodily injury examples can be slipping/falling and breaking a bone or becoming ill after eating food at a special event sponsored by the organization. Slip-and-fall types of policies generally exclude coverage for allegations of wrongdoing where physical injury cannot be proven (i.e. mismanagement, conflict of interest, or harassment). Property coverage, in many cases, is packaged along with GL to allow coverage for damage to office equipment or buildings, however, in its purest form GL only covers the insured for claims resulting in injury.
Why is it important? As a manager, executive director or board of directors of a nonprofit organization you are responsible for executing the purpose and goals of the organization, overseeing its day-to-day operations and risk management exposures to prevent loss for the organization such as an accident resulting in bodily injury allegedly caused by your organization if your premises is not operated in a safe and reasonable manner, or personal or advertising injury, property damage or mismanagement and other exposures.
To learn more about risks, liability, who is responsible for harm or loss, exposures and tools for loss prevention, and much more, please visit the Non Profit Risk Management Center at www.nonprofitrisk.org
What are the benefits? Commercial General Liability insurance provides protection for your organization against claims or lawsuits caused by the action(s) or various operations of your organization. There can be various endorsements to a CGL such as Employee Benefits Liability, Business Interruption coverage, Auto or Hired/Non-owned auto coverage and exclusions such as liquor liability exclusion, abuse and molestation exclusion (unless you request this coverage specifically due to the nature of your organization), all depending on your nonprofits’ needs.
Director's and Officer's Liability (D&O)
What is it? D&O insurance indemnifies an organization (sometimes referred to as the entity) and its officers for allegations for wrongful acts resulting from the management, governance and employment practices of an organization. Some types of claims that would fall under this coverage would be operating outside of the organization bylaws, misappropriated funds and conflict of interest allegations. In addition, most nonprofit D&O polices also provide Employment Practices Liability (EPLI) coverage that indemnifies the insured(s) against such claims as unfair hiring/firing practices, wrongful termination, harassment and discrimination.
Why is it important? Directors, officers and employees, including staff, volunteers and committee members working for a nonprofit, are vulnerable to claims. Without insurance, there would not be any protection from defense costs and years of disposing of such claims and lawsuits even if the claim is groundless. It is known that most of the cost of a D&O claims are associated with legal defense costs.
What are the benefits? Many nonprofits do not have discretionary funds to spare for the defense of a claim and possibly years of litigation. D&O insurance would benefit the nonprofit as a source of funding in defense of a claim filed against it, its directors, officers and employees including staff, volunteers and committee members. Some insurers, such as the endorsed provider of the New York Council of Nonprofits D&O program, offers defense costs outside the limit of liability, meaning legal costs incurred by the insurer would not affect the limit of your policy.
Employment Practices Liability
What is it? Employment Practices Liability Insurance (EPLI) covers an insured person or organization against allegations in the course of employment. Wrongful termination, unfair hiring/firing practices, hostile work environment are some examples of claims that fall under the scope of this coverage. This insurance can be written as a stand-alone policy or included in the Directors & Officers Liability policy to provide a more comprehensive and affordable policy.
Other Liability Insurance
Improper Sexual Conduct Liability – Coverage Endorsement that protects an organization against claims alleging negligent supervision resulting in improper sexual conduct
Professional Liability Insurance Covers an organization and staff for amounts it must pay as damages because of the professional services rendered. Claims can be made for either bodily injury or non-bodily injury allegations, depending on the services rendered. While most liability is typically based on failure to act as a “reasonable person”, many services provided in a professional manor are held to a higher standard by virtue of their training and credentials. Anytime an individual or an organization holds itself out as “The Expert” and advises the public to act or directs actions, it has some exposure to claims arising out of the information given
Employee Benefits Liability- Add-on coverage for negligent administration of an employee benefit plan.
Special Events Coverage – Add-on coverage for events that are specifically excluded in the liability insurance policy
Cyber Security/Liability – Cyber and Privacy policies cover a business’ liability for a data breach in which the firm’s customers’ personal information, such as Social Security or credit card numbers, is exposed or stolen by a hacker or other criminal who has gained access to the firm’s electronic network
Crime (Employee Dishonesty) – Coverage for costs of employee theft and third-party theft. May also add:, client and expense coverage, premises, in transit, forgery fraud such as computer, funds transfer, money order, counterfeit currency, and credit.
Terrorism Coverage – Typically, an add-on coverage with the GL and/or property; provides coverage for damaged or destroyed property—including buildings, equipment, furnishings and inventory. It may also cover losses associated with the interruption of your business, and cover liability claims against your business associated with a terrorist attack
Fiduciary Liability – Coverage for the organization and plan trustees (fiduciaries) resulting from allegations of negligent management of the assets of employee retirement, pension, and welfare plans under ERISA.
Volunteer Liability/Accident/Auto – Coverage if volunteers injure someone, injure themselves, or have an auto accident while performing duties during their volunteer assignment.
Student/Volunteer/Participant Accident Insurance – Accident insurance provides reimbursement of medical expenses incurred as a result of an injury to a student/volunteer/participant (depending on the specific coverage) on a no-fault basis.