Did you know that the nonprofit sector makes up 10% of the American workforce? Believe it or not, the contribution that nonprofits provide to the economy is a major factor in their ongoing success today. Listed below, our resident nonprofit expert and Risk & Insurance 2021 Power Broker Matt Engle shares the importance of nonprofit businesses and details how insurance plays a significant role in the industry.
The Makings of a Nonprofit
The bar has been set fairly high for the creation and management of nonprofit organizations in the United States, as they often provide services that the government does not or cannot provide. Most are intended to strengthen the health and wellbeing of communities across the country. In fact, many nonprofit business owners started their organizations as a result of personal circumstances and the desire to meet an acute need. This heartfelt nature makes their leaders passionate about what they do, which compounds the positive effect on the local economy and the communities they serve.
Key Issues Facing the Industry
- Funding – Inflation and cost of living increases have expanded the need in the market for higher-paying jobs and enhanced job security. Many nonprofits engage volunteers to assist in their cause, but in most circumstances, a paid staff is essential. Thirty percent of Americans volunteer at charitable organizations producing a value of more than $147 billion in expected costs. The other 70% is why substantial funding is paramount for nonprofit organizations looking to be successful long term.
- Abuse & Molestation – A real concern facing not only the nonprofit industry but also many businesses nationwide is abuse and molestation. Companies must work with their staff, clients, and event organizers to ensure the outcomes of this critical and dangerous issue is kept at bay. Many nonprofit business owners assume that abuse and molestation claims are covered under a general liability policy, but that is not necessarily the case. Being hit with a claim can be a public relations nightmare on top of also being detrimental to your bottom line if you don’t have the appropriate insurance coverage. Talking to your insurance broker is more important than ever to ensure you have the necessary coverage.
- Cybersecurity – Data breaches and ransomware attacks have increased substantially in recent years. If an attack happens, compromised personal information of nonprofit staff and volunteers is a legitimate concern for nonprofit business owners. Many organizations already have cybersecurity tools in place to assist their employees with identifying and preventing attacks. Still, hackers can leverage multiple tools to gain access to important information that companies rely on, which is dangerous to business continuity. Mitigating these risks before they happen and securing cyber coverage is imperative to nonprofit business continuity.
Why Partnering with an Experienced Broker Matters
It is easy to assume that your insurance policy is substantial enough to protect your nonprofit from myriad exposures. However, there are often many fine details and exclusions associated with insurance coverage. Something as simple as a volunteer slipping and falling can result in tens of thousands of dollars in medical bills. Therefore, it is imperative to stay in constant contact with your insurance broker to remain cognizant of the perils facing your nonprofit business and ensure you have adequate coverage.
Shopping for the best price for insurance coverage is important, but not nearly as essential as collaborating with a broker that understands the market and knows what risks your company may face. IOA is a full-service insurance agency that works directly with and for nonprofits. Not only can we offer a comprehensive insurance package to meet your unique needs, but we also can offer access to a plethora of resources that can help position your business for sustained success. Stay on top of your insurance needs by contacting a broker today.