Insurance for Non-Profit Organizations

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Insurers determine how much to charge per policy based on the probability that there will be a claim on that policy. Your organization may never have had a claim or a problem, but your premiums will be based on the national statistics your insurer has on file for similar organizations.

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Nonprofit organizations are not required to have insurance to operate in Ontario, except for vehicle insurance for volunteer drivers. Take the example of the risk of serious injury from an accident for daily drivers. How likely is it that:

• an incident would occur? 

• the incident could result in a financial catastrophe for your organization?

• you would require legal help to defend a claim?

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For most nonprofits, it makes more sense to make regular payments (premiums) to an insurer than to risk a financial loss that would severely impact their ability to operate.

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Insurance is generally intended to help policyholders cope with the financial consequences of unpredictable events that are "sudden and accidental." No insurance contracts pay for every potential risk or problem an organization faces. Insurance policies you may need generally fit into two categories:

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1. Loss coverage. These policies provide coverage to items or places that your nonprofit owns (e.g. buildings, vehicles, desks, computers, important papers) in the event they are lost, stolen, or damaged. 

2. Lawsuit coverage. Called liability policies, these policies cover your organization and people from a lawsuit.