Risks Nonprofits Need to Manage

Nonprofits in Toronto may operate in the surrounding area or have missions with international implications. No matter what cause an organization is seeking to advance, nonprofit insurance in Toronto can protect against unexpected costs associated with property damage or exposures to liability. Find out how HUB International brokers can help organizations mitigate risk.

Potential Exposures for Nonprofit Associations

Most organizations that operate on a not-for-profit basis run many of the same risks. Any property owned by an organization can suffer damage that could cost hundreds or thousands of dollars. Without insurance coverage, costs associated with liabilities might have to be paid out of the operational budget or endowment of a not-for-profit organization. Insurance can cover a wide range of costs based on the type of policy. Here are a few of the risks that it is most important for nonprofits to protect against with policies designed for associations, foundations, and institutions:

• Property damage: Nonprofits may operate a headquarters or regional facilities or manage other assets. Any property belonging to an organization should be insured against direct physical loss and property damage. 
• General liability: Broad liability coverage is also important for claims of bodily injury and property damage arising from the premises or operations of an organization. Many other specific types of liability coverage are available to nonprofits based on mission-related risk exposures.
• Professional liability: Policies that cover professional liability can be a critical type of nonprofit insurance in Toronto. These policies cover liability for mistakes made in rendering professional consulting, counseling, healthcare, legal or other skilled services.

Common Insurance Policies for Organizations

Once nonprofit stakeholders are made aware of general risks associated with running an organization, these decision-makers are more prepared to identify and address the unique coverage needs of an association. The mission and operational structure of an organization should factor into coverage for a not-for-profit group, foundation, or institution. Insurance brokers often recommend some or all the following types of nonprofit insurance in Toronto:

• Property insurance: Any facilities a nonprofit owns should be insured against damage from a wide variety of common causes. Property insurance policies reduce unexpected out-of-pocket costs that could otherwise interfere with the operating budget of an organization or its fundraising goals.
• Management liability: A liability policy that focuses on management can protect the founders and managers of an organization from liability. These policies are useful for dealing with the consequences of employee-related offenses or wrongful acts as fiduciaries.
• International package: An international insurance package is helpful in the event of injuries to nonprofit staff or damage to organizational property that occurs outside Ontario or Canada. International coverage can also extend to incidents that occur during professional travel or property lost abroad.
• Political risk: Organizations operating in areas that are experiencing political instability may want to consider political risk coverage. These policies can provide some level of protection against political violence and the expropriation, confiscation, or nationalization of the organization's assets by foreign governments, as well as more common issues such as the inconvertibility of currency or the revocation of licensure.

Discussing the liabilities of a not-for-profit association, foundation or institution with a HUB International insurance broker is one of the best ways to recognize risks that may not be immediately obvious but could increase the financial burden on an organization or the legal responsibility of the group and its management.