If you are an insurance agent working with non-profit employers, you’ve probably sold them much of the standard suite of benefits products. Health, disability, dental, life. These products are must-haves for any employer. They help to attract and protect quality talent.
But what about protecting the non-profit? Non-profits have special risks that make liability insurance a sound investment. At Zywave, we want to help our partners service their clients effectively, while also helping you to cross-sell more products. That’s why we’ve put together this list of our top 3 reasons non-profit agencies should carry liability insurance.
(Hint: You can find many more tips like these in our agency insurance software products.)
1. Employment Practice Liability (EPL) claims are on the rise.
This means that employees are suing their bosses more and more. According to the US Equal Employment Opportunities Commission, the number of discrimination lawsuits against private employers was close to 100,000 last year. This is true for both businesses and nonprofits. But it is especially burdensome for charitable organizations that rely on donations for their revenue. Why? Donors expect your client to spend their money on the cause. If your clients use donations for something else, like paying off a lawsuit, the donor can turn around and sue for misuse of funds. That’s an expensive double whammy.
2. Nonprofits have to consider professional liability.
If your clients provide any services to the public, especially in the health or mental health care sectors, they can be sued for malpractice. All nonprofits should carry professional liability insurance, also sometimes called “errors and omissions” or “malpractice” insurance. It covers claims of harm to patients and customers of the nonprofit agency. Even if your client’s licensed staff members hold personal professional liability insurance, the agency still needs its own policy. It covers not only management and staff but volunteers as well. Which brings us to our next point.
3. Nonprofits rely heavily on volunteers.
Most non-profits could never afford to do all the good work they do without the support of volunteers. These good Samaritans offer up their time for free, and they are often passionately dedicated to the cause. But even if your client screens the unpaid workers and offers them training, they usually don’t have the same level of skill and experience as paid staff. This could result in volunteers giving misleading or wrong advice to your clients; substandard quality of work, resulting in harm to your clients; and sometimes even client or volunteer abuse. All of these factors can lead to lawsuits.
Next time you meet with one of your nonprofit clients, be sure to mention liability insurance. And if you need even more information about cross-selling products, be sure to check out the educational materials available in Broker Briefcase!