Commercial General Liability Insurance
What? Commercial General Liability insurance is a “core” coverage for a nonprofit that provides protection against “negligent” acts. These acts must include bodily injury, and property damage to a third party, and may include personal injury (libel or slander).
Who? The injured party can be a client, visitor, or volunteer, alleging a claim against a nonprofit agency or its staff, and possibly its volunteers (if you’re with a company specializing in nonprofits).
When? Your policy should be reviewed annually, as your nonprofit’s programs shift. You should plan your review 2-3 months before your annual renewal date, so you have plenty of time to make an informed decision. You should have a thorough understanding of an “occurance” policy and a “claims made” policy when renewing, to prevent gaps in coverage.
Where? Injuries can occur on the premises, at special events, and anywhere your staff or volunteers are acting on behalf of the organization. Be sure to tell your insurance specialist about all locations: offices, warehouses, special events, outreach locations, etc., and request “worldwide” coverage.
How? An injured party will file a lawsuit against a nonprofit alleging negligence. (Example: A client trips and falls while leaving an appointment at your office). Do you report incidents to your insurance company? Do you only report claims? Is your staff aware of the procedures to take when injuries/claims arise? You should be aware of your “duties” in the Conditions section of your policy.
How Much? Damages will be paid if the alleging party can prove that the nonprofit has breached its “duty of care”, that an injury occurred, and that the breach of duty caused the injury. It can be very costly to defend a claim, even if the claim is fraudulent. Your policy should pay the costs to defend a claim (legal expenses), in addition to any damages awarded to the injured.
What’s the worst that could happen? If you believe that your nonprofit does not need General Liability insurance, consider what you would do if a client filed a claim against your organization….How would you pay for your defense? Would your donors object to the organization spending their money on indemnification? What would happen to your good name?
Don’t take any chances…protect your nonprofit…understand
your insurance coverage. We’re here to help you through the maze! Contact
your local nonprofit insurance specialist for more information:
Schweickert & Company
15 Peters Canyon Road
Irvine, CA 92606
Direct Phone/Fax: 714-689-1772
Email: Laura@schweickert.com
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