Insurance For A Non-Profit Organizations

Shawn Plummer

CEO, The Annuity Expert

What Types of Insurance Should a Non-Profit Have?

While operating with the noble aim of serving the community, non-profit organizations face various risks that can jeopardize their mission, assets, and employees. Understanding and acquiring the right types of insurance is essential for mitigating these risks. Here are the key types of insurance a non-profit should consider:

General Liability Insurance

Coverage: This insurance protects against claims of bodily injury or property damage that occur on the non-profit’s property or as a result of its operations.

Example: If a visitor slips and falls at a charity event hosted by a non-profit, general liability insurance can cover the medical costs.

Directors and Officers (D&O) Liability Insurance

Coverage: D&O insurance protects the personal assets of the organization’s board members and officers if they are sued for wrongful acts or decisions made in their capacity as non-profit leaders.

Example: If a board member is sued for alleged mismanagement of the organization’s funds, D&O insurance can cover the legal fees and settlements.

Professional Liability Insurance

Coverage: Errors and Omissions (E&O) insurance covers claims against the non-profit for negligent professional services or advice.

Example: If a counseling service the non-profit provides is accused of causing harm due to negligence, this insurance would cover defense costs and settlements.

Workers’ Compensation Insurance

Coverage: Workers’ compensation covers medical expenses and a portion of lost wages for employees who are injured on the job.

Example: If an employee of the non-profit is injured while setting up for a fundraising event, workers’ compensation would cover their medical bills and a part of their lost income.

Property Insurance

Coverage: Property insurance protects the non-profit’s physical assets, such as buildings, furniture, and equipment, against loss or damage due to events like fire, theft, or natural disasters.

Example: If a flood damages the non-profit’s office and its contents, property insurance would help cover the repair or replacement costs.

Cyber Liability Insurance

Coverage: This insurance covers liability and expenses arising from a data breach or cyber-attack on the non-profit’s electronic systems.

Example: If hackers breach the non-profit’s database and steal sensitive donor information, cyber liability insurance can cover the costs associated with notification, credit monitoring services, and legal defense.

Insurance For A Non-Profit

Types of Insurance for Non-Profits

Type of InsuranceCoverage DetailsExample Scenario
General Liability InsuranceBodily injury or property damageVisitor injury at an event
Directors and Officers Liability InsuranceProtection for board members/officersLawsuit against a board member for mismanagement
Professional Liability InsuranceNegligent professional services or adviceHarm caused by counseling services
Workers’ Compensation InsuranceInjuries to employees on the jobEmployee injured during event setup
Property InsuranceDamage or loss of physical assetsOffice damaged by a flood
Cyber Liability InsuranceData breaches or cyber-attacksStolen donor information from database


Non-profits should strategically assess and manage risks by investing in a comprehensive insurance portfolio. From general liability to cyber liability insurance, these protections offer peace of mind and stability, allowing non-profits to focus on their mission without the looming threat of financial devastation. Ensuring you have the right coverage in place is pivotal to the longevity and success of your organization. A well-informed decision on insurance can safeguard your non-profit’s future, assets, and the well-being of those it serves and employs.

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Frequently Asked Questions

What is the most common type of non-profit organization?

The most common type of non-profit that comes to mind for people is a 501(c)(3). These are called “charitable organizations” and operate as you would anticipate.

What are the three major categories of non-profit organizations?

There are three main categories that organizations can qualify for: public charities, private foundations, and private operating foundations. This eligibility applies to most organizations.

What are the four categories of non-profit organizations?

There are four ways in which a non-profit organization can structure itself: through an unincorporated association, a trust, a corporation, or a limited liability company.

What is a typical example of a non-profit organization?

Non-profit organizations encompass various entities such as churches, public schools, charities, clinics, hospitals, political groups, legal aid societies, volunteer services groups, labor unions, professional associations, research institutes, museums, and some government agencies.

Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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