The COVID-19 pandemic has taxed nonprofit resources and exacerbated financial pressures and staffing constraints that many organizations were already experiencing.

Nearly 60% of nonprofits are understaffed and nearly half lack adequate resources.¹ These and other factors have driven an 18% spike in nonprofit workers’ compensation claims.

Nonprofits face unique risks as well: From managing off-site volunteers to responding to communities in crisis and hosting fundraisers, nonprofits have exposures unlike the private sector.

If not properly managed, those risks generate costly insurance claims and rate increases to go with them.

How to reduce claims — and ultimately, insurance rates

Nonprofits can reduce their exposure through thoughtful, proactive risk management. Here are five steps that can help an organization reduce its claims and insurance rates:

1. Leverage the power of analytics. Claims detail can provide valuable clues about where operational improvements can be made in an organization. Review the last five years of loss data to identify root causes of claims. Identify strategies to enhance post-accident investigation, reporting, claim investigation and disposition. Take corrective actions and monitor the results, adjusting accordingly.


2. Promote consistent post-accident investigation. Develop a comprehensive incident report form for use across the entire organization and train employees and volunteers on how to use it. This post-accident investigation report should detail contributing causes to any incident — including the who, what, where, when and how of an incident — and remind staff to preserve critical evidence while it’s available.


3. Train staff and volunteers on accident prevention. The best strategy is to prevent accidents before they happen. Train personnel on property conservation, life safety, travel safety and security. Promote a culture of risk awareness, which can curb accidents and injuries.


4. Review contracts with staff, volunteers and vendors. Whether with a client, a grantee, a staffer or a vendor, every relationship brings risk. Review contracts to identify ways to deflect risk to others when possible. If a contract requires the nonprofit to accept the risk, it needs to make sure its insurance program can accommodate that risk.


5. Highlight corrective actions. Just because a nonprofit had claims doesn’t automatically mean it will see premium hikes. A nonprofit with recently made claims should outline the corrective actions the organization has taken to prevent reoccurrences. It’s important to show insurers that the organization has learned from their losses and is a better risk today.

Contact HUB International’s team of nonprofit experts to best manage your nonprofit’s exposure and risk of claims.

¹ Neon One, “3 Things We Learned from the 2020 Nonprofit Leadership Impact Study,” May 12, 2020.