Here to Help
At LSi, we have found a niche in helping insure these types of organizations while mitigating risks to ensure financial stability for your specific mission, “Serving you so you can serve others.”
Throughout the decades, we have had the opportunity to advise a variety of nonprofit organizations and have discovered common factors unique to you. This has given us extensive experience and understanding within the Nonprofit Sector that will provide your organization with the solid support needed to protect your specific cause.
Additionally, we have continued to partner with only the most financially stable and lead industry Insurance Carriers to be able to tailor an Insurance/Risk Program that fits YOUR organization.
Directors and Officers Insurance
Risk Factor
What happens if a board member invests the non-profit's assets unwisely and loses everything? A creditor might sue the non-profit as well as its directors and officers. Non-profit organizations are not immune to lawsuits. It’s possible someone may disagree with the way you run the organization and file suit. Oftentimes, non-profits don't have deep pockets to fight these types of lawsuits, therefore putting the organization at risk.
Solution
Directors and officers liability insurance protects your directors, officers, trustees, employees, volunteers, and the entity from any act or alleged act, error, omission, misstatement, misleading statement, or breach of duty.
General Liability Insurance
Risk Factor
Water on the floor, slippery entry in the winter, broken glass/hazardous debris, etc. These can all be accidents waiting to happen that make your non-profit susceptible. Claims may arise due to bodily injury, property damage, personal injury, and more.
Solution
General liability insurance is an absolute necessity for any business. It provides broad coverage when you are deemed responsible and liable, and will also pay to defend any covered lawsuit or action regardless of its merit.
Workers' Compensation
Risk Factor
If one of your employees receives an injury or becomes ill due to a work-related occurrence, you are required by law to have the proper coverage in place.
Solution
Workers' compensation protects your employees should a job-related injury or sickness occur during the course of employment. This coverage is required by law and may vary by area, so be sure that you understand your obligations for all physical locations where your business operates in and all physical locations where you hire your employees.
Commercial Property Insurance
Risk Factor
When a fire, theft, or another type of disaster strikes, your commercial property and everything within it can suffer a significant loss. This can have a detrimental effect on your organization.
Solution
Commercial property insurance can help protect the property your business owns and leases, including things like equipment, inventory, furniture, and fixtures. Whether you own your building or lease your workspace, commercial property insurance can be purchased separately or can be combined with other necessary coverage to protect your business’ physical assets.
Employment Practices Liability Insurance (EPLI)
Risk Factor
On average, it's estimated that three out of five businesses will be sued by their employees. Claims can stem from just about anything, such as someone taking a joke the wrong way and being offended. While there is nothing you can do to prevent someone from filing a lawsuit, there is something you can do to limit the costs of defending a legal claim.
Solution
The right coverage is critical to your risk management process as it protects against discrimination, wrongful termination, sexual harassment, and other employment-related allegations.
Business Income Insurance
Risk Factor
What would you do if an email virus impacted the operation of your database and prevented you from serving clients for a day or more? Or what if a hacker or cyber criminal caused a system outage or extended downtime, leaving your business inoperable? These and other events can destroy your ability to serve clients and bring in revenue, which can have a major long-term impact on the viability of your business.
Solution
Business income insurance compensates you for lost income if your company cannot operate as normal due to disaster-related damage that is covered under your commercial property insurance policy, such as a data breach or cyber attack. Business income insurance covers the revenue you would have earned, based on your financial records, had the disaster not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.
Professional Liability
Risk Factor
Lawsuits can happen to anyone, and the damages can be hefty whether you win or lose. Even if you’ve done nothing wrong, you’ll need to defend yourself. So regardless of whether a contract requires it, without professional liability coverage, you could be putting your business’ future at risk.
Solution
Similar to directors and officers liability insurance, professional liability coverage protects against liabilities resulting from mismanagement of the organization, as well as workplace-related claims such as discrimination or sexual harassment. It covers not only directors and officers, but also staff, volunteers, and the non-profit organization itself.
Different Types of Nonprofit Organizations Within the U.S.
Technically, under the IRS’s 501(c) code, there are two main types of nonprofits: nonprofit organization (NPO) and not-for-profit organization (NFPO). NPO’s serve the public via goods and services while a not-for-profit organization (NFPO) may serve just a group of members. 501(c)(3), are organizations that are “corporations, funds or foundations that operate for religious, charitable, scientific, literary or educational purposes.” Conversely, NFPOs may exist for more private focused groups or members.
Some other types include:
- Section 501(c)(4): civic leagues and social welfare organizations, homeowners associations, and volunteer fire companies.
- Section 501(c)(5): such as, labor unions
- Section 501(c)(6): such as, chambers of commerce
- Section 501(c)(7): such as, Social and Recreational Clubs
- Section 501(k): childcare-related organizations
The U.S. Internal Revenue Code contains many different classifications of tax-exempt groups.
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