{"id":242,"date":"2015-10-17T09:00:52","date_gmt":"2015-10-17T09:00:52","guid":{"rendered":"http:\/\/www.insurancebee.com\/blog\/?p=242"},"modified":"2021-11-08T17:12:21","modified_gmt":"2021-11-08T17:12:21","slug":"what-insurance-charity-needs","status":"publish","type":"post","link":"https:\/\/www.insurancebee.com\/blog\/what-insurance-charity-needs","title":{"rendered":"What insurance do charities need?"},"content":{"rendered":"<p><a href=\"https:\/\/www.insurancebee.com\/blog\/what-insurance-charity-needs\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-247\" src=\"https:\/\/www.insurancebee.com\/blog\/wp-content\/uploads\/2013\/10\/6280514227_b598f645e5_b-300x225.jpg\" alt=\"what insurance do charities need\" width=\"600\" height=\"450\" srcset=\"https:\/\/www.insurancebee.com\/blog\/wp-content\/uploads\/2013\/10\/6280514227_b598f645e5_b-300x225.jpg 300w, https:\/\/www.insurancebee.com\/blog\/wp-content\/uploads\/2013\/10\/6280514227_b598f645e5_b-940x705.jpg 940w, https:\/\/www.insurancebee.com\/blog\/wp-content\/uploads\/2013\/10\/6280514227_b598f645e5_b.jpg 1024w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><\/p>\n<h2><b>Charitable\u00a0needn&#8217;t\u00a0mean unprofessional<\/b><\/h2>\n<p>Like any business, charities need insurance. The most successful charities, after all, are those which are run like a business.<\/p>\n<p>That means making sure the budget is spent efficiently and professionally.<\/p>\n<p>A successful charity should have:<\/p>\n<ul>\n<li>Clear goals and a plan of how to achieve them.<\/li>\n<li>A sleek website and clever use of digital media to raise awareness and donations.<\/li>\n<li>The right insurance.<\/li>\n<\/ul>\n<p>Insurance is vital. Because unfortunately, despite all a charity&#8217;s good works, they are not immune to lawsuits.<\/p>\n<p><a href=\"https:\/\/definitions.uslegal.com\/c\/charitable-immunity\/\" target=\"_blank\" rel=\"noopener noreferrer\">Immunity statutes<\/a> exist to try and limit the damage claims can cause to charities and non-profit organizations.<\/p>\n<p>These work by raising the threshold a plaintiff must meet to prove their case. For example, there would have to be evidence of <i>gross <\/i>negligence for an organization to be found negligent.<\/p>\n<p>However, these statutes are not enough to defend charitable foundations against lawsuits entirely.<\/p>\n<p>Unless a charity is properly insured, a single liability claim could eat up its precious budget. It could even put the charity out of operation.<\/p>\n<p>So, what are the basic insurance policies charities need?<\/p>\n<h2><b>Basic insurance charities need<\/b><\/h2>\n<p>If people come to your charity&#8217;s headquarters, or you go to visit them, you need <a href=\"https:\/\/www.insurancebee.com\/general-liability-insurance\" target=\"_blank\" rel=\"noopener noreferrer\">general liability insurance<\/a>. Then, if visitor gets hurt, or you damage someone&#8217;s property and they sue, your policy can pay for medical bills, legal fees, and compensation.<\/p>\n<p>If you have employees, you need <a href=\"https:\/\/www.insurancebee.com\/workers-compensation-insurance\" target=\"_blank\" rel=\"noopener noreferrer\">workers&#8217; compensation insurance<\/a>. It&#8217;s required in most states the minute you take on your first hire.<\/p>\n<h2><b>Protecting board members<\/b><\/h2>\n<p>A type of insurance charities need, but which is often overlooked, is <a href=\"https:\/\/www.insurancebee.com\/directors-and-officers-insurance\" target=\"_blank\" rel=\"noopener noreferrer\">directors\u2019 and officers\u2019 insurance<\/a>.<\/p>\n<p>That&#8217;s because members of your charity\u2019s board of directors can be personally sued if something goes wrong for the organization.<\/p>\n<p>Charities rarely have the finances to cover their own needs so it\u2019s likely that the board member would have to pay any costs themselves.<\/p>\n<p>This is where <a href=\"https:\/\/www.insurancebee.com\/directors-and-officers-insurance\" target=\"_blank\" rel=\"noopener\">directors\u2019 and officers\u2019 insurance<\/a> comes in. If someone accuses a board member of wrongdoing, a D&amp;O policy can cover their defense costs and compensation, if they&#8217;re liable.<\/p>\n<h2><b>Who would actually sue a charity?<\/b><\/h2>\n<p>It&#8217;s typically employees who make claims against board members of private companies. The same is true for charities.<\/p>\n<p>Applicants rejected for both paid and voluntary vacancies can sue if they feel they\u2019ve been discriminated against.<\/p>\n<p>Employees can also claim for things like unfair dismissal or sexual harassment.<\/p>\n<p>Charitable organizations without employees sometimes think they don&#8217;t need directors\u2019 and officers\u2019 insurance. And for smaller charities, whose risks are properly assessed and managed, that may be true.<\/p>\n<p>However, not all claims against board members come from employees.<\/p>\n<p>Even when no third parties have made a complaint, there have been cases where a states&#8217; attorney general brought an action against a charity. For example for misuse of funds &#8212; engaging in charitable activity not specifically detailed in the charity&#8217;s charter.<\/p>\n<p>If a patron believes their donation is not being used for its intended purpose &#8212; even if it&#8217;s still for the charity&#8217;s benefit, they can also sue.\u00a0 An example of this would be using a donation to repair damage to an organization&#8217;s headquarters.<\/p>\n<h2><b>Risk management<\/b><\/h2>\n<p>Even with a\u00a0 risk management plan in place, it\u2019s difficult to make sure charities operate in a way that\u2019s totally risk-free at all times. Accidents happen. Mistakes are made.\u00a0 That&#8217;s why having the right insurance for your charity is vital for your peace of mind, and protection.<\/p>\n<p>Not only can <a href=\"https:\/\/www.insurancebee.com\/directors-and-officers-insurance\" target=\"_blank\" rel=\"noopener noreferrer\">directors\u2019 and officers\u2019 insurance<\/a> cover board members&#8217; personal assets, but it also helps protect your charity&#8217;s integrity. And when you think of the positive impact a charitable foundation has on the lives of others, that&#8217;s something worth protecting.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Charitable\u00a0needn&#8217;t\u00a0mean unprofessional Like any business, charities need insurance. The most successful charities, after all, are those which are run like a business. That means making sure the budget is spent efficiently and professionally. A successful charity should have: Clear goals &hellip; <a href=\"https:\/\/www.insurancebee.com\/blog\/what-insurance-charity-needs\">Read more&#8230;<\/a><\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,14],"tags":[21,15,16],"class_list":["post-242","post","type-post","status-publish","format-standard","hentry","category-directors-and-officers","category-non-profit-groups","tag-charitable-foundations","tag-directors-and-officers-insurance","tag-non-profit-organization"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\r\n<title>What insurance do charities need | Charity insurance<\/title>\r\n<meta name=\"description\" content=\"Like any business, charities need insurance. 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