Nonprofit organizations could get their insurance from a traditional insurance company, just like any for-profit business. However, you want an insurance company that understands a nonprofit businesses unique needs. Here are our recommendations for the top nonprofit insurance companies.
- The 5 best nonprofit insurance companies
- Why do nonprofits need business insurance?
- What kind of business does nonprofit organizations need?
- How much does nonprofit insurance cost?
- How to find cheap nonprofit insurance?
- What if I run my nonprofit out of my home?
The 5 best nonprofit insurance companies
We research more than 15 companies offering business insurance for non-profit organizations and here are our recommendation for the top 5.
- CoverWallet: Best for online quotes
- biBERK: Best for affordable rates
- AmTrust: Best for workers compensation insurance
- Nonprofits Insurance Alliance: Best for risk management services
- Affinity Nonprofits: Best for Directors & Officers, or D&O insurance
CoverWallet: Best for online quotes
CoverWallet has affordable business policies that are easy to bundle. They work with a number of partners, so when you enter your information, you should get a few quotes to choose from, without the hassle of entering your information over and over again.
They offer many different policies that a nonprofit might need, such as:
- General liability
- Business owner’s policy
- Directors and Officers
- Employment Practices Liability Insurance (EPLI)
- Cyber liability
- Fiduciary liability
- Inland marine
And many more.
We got this message when we requested a general liability quote for our animal rescue nonprofit:
If you are unsure of what kind of insurance or how much insurance you need, you can call a CoverWallet agent, and they can help you sort it out.
biBERK: Best for affordable rates
biBERK claims they can save you 20% on business insurance, since they don’t work with agents and can save money by cutting out the middleman. Once you have your insurance quote (which is a breeze to get) you can purchase the policy online, pay online, and manage it online. Coverage begins immediately.
This is a quote for a professional liability policy for a nonprofit organization with four employees and $400,000 in annual budget. As you can see, the Plus plan included cyber liability and the standard does not.
biBERK is a subsidiary of Berkshire Hathaway, the owner of the car insurance household name, Geico. You will feel more comfortable knowing that they have the financial backing and deep experience in the insurance industry.
AmTrust: Best for workers compensation insurance
AmTrust is a good choice for workers compensation insurance for your nonprofit, which you need in most states if you have even one employee. They also offer business owners policies, commercial property, cyber insurance, EPLI, general liability, and inland marine insurance.
AmTrust has a large portfolio of specialty insurance products catering to nonprofits. They acquired First Nonprofit Insurance Company in 2013 and have kept that focus on nonprofits. You’ll have to submit audited year-end financial statements (or Form 990 if you don’t have year-end statements) to prove you’re a nonprofit in order to qualify. Also, they don’t offer quotes online, as you’ll have to work with an agent.
Nonprofits Insurance Alliance: Best for risk management services
As you can probably glean from the title, Nonprofits Insurance Alliance focuses on nonprofit companies. As such, they have a wealth of experience and expertise to help you get the coverage you need. You’ll also receive risk management services to reduce the chances of you being sued.
They have strong customer retention: once someone signs on with Nonprofits Insurance Alliance, they tend to stick with them. They have a variety of policy options as well, although you’ll need to be a 501(c)(3) nonprofit and you’ll need to apply through a broker. There are no online quotes, and the quote process can take days. Also, they are not available in every state: here’s a list of the states they cover.
Affinity Nonprofits: Best for Directors & Officers, or D&O insurance
Affinity Nonprofits serves nonprofit organizations and only nonprofits. They offer:
- Directors & Officers
- Property & Casualty
- Event Cancellation
- Volunteer Accident program
They are licensed in all fifty states. To get a quote, you’ll just need to submit an email or call them. They will craft a policy specifically for your business. The Directors & Officers insurance policy covers current and former staff directors, officers, staff members, and volunteers. They don’t have online quotes and they don’t even have online chat—you’ll have to email them with your questions. But they insure over 65,000 nonprofits, and most of them choose to renew their policies. The Directors & Officers insurance included cyber liability, workplace violence, and breach of contract.
Why do nonprofits need business insurance?
Although you, as an owner or director of a nonprofit, are not focused on money, that doesn’t mean that people won’t think to sue you. You need to protect yourself and your nonprofit from lawsuits. At the end of the day, nonprofit might have different goals, but it is still operated just like a for-profit business and people working for a nonprofit organization is similar to working for a for-profit company. As a result, a nonprofit organization is exposed to similar risks to a for-profit company. They may need similar business insurance coverages. Learn more at Nonprofit Insurance: What It Is, What It Covers, & Cost
What kind of business does nonprofit organizations need?
As there is no insurance specifically for nonprofit companies, you’ll have to select the types of insurance you need. Coverage you might want to consider includes:
- General liability insurance
- Directors & Officers insurance
- Commercial property insurance
- Commercial auto insurance
- Workers’ compensation
- Professional liability insurance
- Cyber insurance
Admittedly, it can be hard to figure out what kind of insurance you need and what your coverage limits should be. A study by the U.S. Chamber of Commerce called “Business Insurance 101” may provide some guidance. For the most part, a business owners policy or BOP and workers compensation insurance should cover you for most instances, while still being affordable. A BOP policy combines general liability and commercial property coverages in one simple policy to help small nonprofit organizations save money. If your nonprofit organization employs less than 100 people or has an annual budget of $10M or less, you may want to consider a BOP policy.
General liability insurance for nonprofits
General liability insurance or also called commercial liability insurance. Even though your organization does not provide services for commercial purposes, it likely needs this coverage. It helps protect your not-for-profit from claims of bodily injury and property damage that happen at your work or service locations or while your employees are doing their jobs. This is critical coverage for nonprofits that work with elderly or infirm people, or children, who are more likely to slip and fall and become injured. Commercial liability coverage protects against things like visitor injuries that result from a slip and fall in your workplace or property damage that happens because of a worker accident when visiting a person’s home for outreach and other work related reasons.
Directors and officers insurance (or D&O) for nonprofits
This policy has become increasingly popular amongst nonprofit organizations. Directors and officers, or D&O, for nonprofits, will help pay legal expenses and damages if a director or officer at your nonprofit is sued because of a decision they make about the operation or direction of your organization.
D&O insurance helps attract talents to work for your nonprofit since they know that they are protected and can focus 100% on doing their best job.
The average cost of nonprofit D&O insurance is about $100 per month, or $1,200 a year. However, this varies depending on the size of the nonprofit organization. Learn more at nonprofit D&O insurance cost: how much is it?
Commercial property insurance for nonprofits
Commercial property insurance covers losses in your physical locations resulting from things like weather damages, fire, theft or vandalism.
If your nonprofit owns or rents a physical space for its operations, be it an office, a warehouse, or a building, you’ll need to have a commercial property insurance policy.
Commercial auto insurance for nonprofits
Commercial auto pays for damage to vehicles and the cost of medical care if any employee is involved in an accident while driving for work related reasons.
If you use a vehicle for your nonprofit activities, you need to have a commercial auto insurance policy. It may be a bit more expensive than personal auto insurance policy. However, it may be a lot more expensive if you skip it. Without a proper commercial auto insurance policy, your personal auto provider will refuse your claims or even worse, they will drop you off altogether.
Workers compensation insurance for nonprofits
If your nonprofit has employees, your state likely requires you to carry workers’ compensation coverage. This insurance provides benefits to your employees to help them recover from work-related injuries or illnesses. Two examples of these include:
- A worker at your nonprofit is stocking shelves, slips off a ladder and breaks her leg. This makes her unable to do her job.
- An administrative assistant at your not-for-profit has been working on a computer while sitting on an ergonomically poor chair and comes down with carpal tunnel syndrome. She is no longer able to do her job because she’s in pain.
Workers’ comp also pays funeral expenses and death benefits to immediate family members should an employee pass away because of a job related incident.
Depending on the type of nonprofit, it might not be the riskiest job in the world. But you never know, you need a workers compensation insurance policy to protect you and your employees.
Professional liability insurance for nonprofits
Professional liability insurance covers you and the people who work for you if you’re ever sued by someone for giving them bad advice or not performing services to their satisfaction.
Depending on the type of nonprofit, you might not need this coverage. However, if your nonprofit operates by giving advice to your customers or clients, be it medical, legal, or finance-related advice, you will need professional liability insurance policy. In some cases, it might be called malpractice insurance or E&O insurance.
Cyber insurance for nonprofits
Cyber insurance helps pay expenses related to the theft or loss of critical donor, client, employee or operational information. There are two types of cyber insurance: cyber liability insurance and data breach insurance. Most businesses and nonprofits might just need data breach insurance. If your operations handle a lot of sensitive financial and medical data, you might consider a cyber liability insurance policy.
If your nonprofit stores sensitive data in your computer system, even just a little, you need to get a data breach insurance policy. Nowadays, this has become more and more popular for any type of businesses, including nonprofits.
>>MORE: Best Cyber Insurance Companies
How much does nonprofit insurance cost?
The average cost of a general liability policy for a nonprofit is about $45 a month. The average cost of a BOP policy for a nonprofit is $90 a month. The actual insurance cost for your nonprofit organization depends on several factors such as the size of your nonprofit in terms of annual budget and the number of employees, the field your nonprofit operates in, how long the nonprofit has been around, the location, etc.
Below are some statistics on the general liability insurance cost that nonprofit organizations are paying:
- 24% nonprofit organizations pay less than $400 a year,
- 41% pay between $400 and $600 a year,
- and 35% pay over $600 a year.
They recommend $1million per occurrence limit/$2 million aggregate limit, but if your nonprofit is very large, you might need more coverage.
You will get different quotes from different insurance companies for your nonprofit, be sure to shop around with a few companies or with a digital broker like CoverWallet or PolicySweet to compare several quotes to find the cheapest one for your nonprofit.
How to find cheap nonprofit insurance?
Here are some tips to help you find the coverage you need at a fair price:
- Shop around for the best value. Get quotes from a few companies and compare them to get the right coverage at the lowest possible cost. Shopping with a digital broker like CoverWallet or PolicySweet is a great way to compare quotes since they are working with several companies and are able to pull quotes from these companies for you.
- Don’t stop shopping around. Make sure you get new quotes before you renew your policy. Again, your insurance cost will change every 6 or 12 months, make sure you shop again for a better deal before deciding to renew with the current company.
- Implement all safety standards and requirements in the field you are operating. And follow the right procedures and processes recommended by the insurance companies. You will not only get better rates, but also reduce the possibilities of causing harm and damages to any third party or your own employees. Your business insurance rates will improve over time.
- Take advantage of discounts. If they’re not offered to you when getting a quote, ask about them, whether you’re buying online or through an agent.
Taking these steps will help ensure you’re not paying too much for insurance for your nonprofit.
What if I run my nonprofit out of my home?
It would be nice if your homeowners’ insurance covered your business, but it probably doesn’t. Many homeowners’ policies specifically prohibit running a business, and if they find out, they could deny your claim and then drop you as a customer. Contact your homeowners’ insurance company if you run a business out of your home. Adding a small business insurance policy is not that much more expensive than your homeowners’ insurance.
Running a nonprofit business is rewarding, although it doesn’t leave a lot of money left over. Still, you do need business insurance to protect yourself against the biggest risks. You’ll want a company that understands the special nature of nonprofits and is dedicated to helping you reach your goals.