Business Insurance for a Nonprofit Organization
There are few laws requiring you to have insurance, but if you do not have insurance you may face liability that may jeopardize your business. You should be aware of the types of insurance available and weigh the risks of a loss against the cost of a policy.
Be aware that there can be a wide range of prices and coverage in insurance policies. It is good to compare quotes from different insurance agents and ask each one to explain the benefits of his or her policy.
In most states, if you have four or more employees, you are required by law to carry workers' compensation insurance. It protects you if an employee is injured while on the job.
To protect yourself from litigation, you may wish to carry workers' compensation insurance even if you are not required to have it. This insurance can be obtained from most insurance companies, and at least for low-risk occupations, it is not expensive. Failure to provide workers' compensation insurance when required is considered serious. If a person is injured on a job, even if another employee caused it or the injured person contributed to his or her own injury, you may be required to pay for all resulting losses.
One of the worst things that can happen to your organization is a fire, flood, or other disaster. Losses after such an event have caused many organizations to close. The premium for such insurance is usually reasonable and could protect the organization from certain losses..
If you or any of your employees will be using an automobile for business purposes, be sure that such use is covered. Sometimes, a policy may contain an exclusion for business use. Check to be sure your liability policy covers you if one of your employees causes an accident while running a business errand.
While new organizations can rarely afford health insurance for their employees, the sooner they can obtain it, the better chance they will have to find and keep good employees. As the person running the organization, you will certainly need health insurance for yourself (unless you have a working spouse who can cover the family), and you can sometimes better rates if you purchase a small business package.
If you fear employees may be able to steal from the organization, you may want to have them bonded. This means that you pay an insurance company a premium to guarantee employees' honesty, and if they cheat you, the insurance company pays you damages. This can cover all existing and new employees.