Colleagues,
In your experience, is it reasonable or necessary (either) to get this type of coverage for a not-for-profit? What types of
Background; well structured, all volunteer, run about 10 "wine and dine" networking type events per year at various locations. Turnover is under $50K per year total.
I really havent thought of this for companies filing form 990. It wouldnt hurt.
Probably they will never happen -- the things that insurance covers, I mean -- but you buy insurance because they might. You don't have to let your imagination go too far to think of needing it: You sponsor a "wine and dine" event, and one of the participants has too much to drink and runs over a kid on a bike. The distraught parents sue everything that moves. That's when you will wish you had looked into buying insurance.
A NFP should protect its volunteer board from litigation risk with D&O insurance. From a GL standpoint, as Mr. Hoster states, you can think of any number of scenarios where GL insurance would be needed if you are hosting events or have other services you are providing. Most insurance doesn't make sense from a probability or financial return standpoint, but you aren't buying insurance for an event that is likely to occur.
All the non-profit organizations I have served or managed have had this insurance to protect volunteers as well as staff. I view it as a cost of doing business for both a 501(c)3 and a 501(c)6 organization. Why would you expose directors, other volunteers and officers to this financial risk when you can cheaply mitigate it? Ditto for liability coverage - cheap protection against things you did not plan to have happen.
I have sat on a number of Not-for-Profit Boards over the past 25 years and while I have no "horror" stories to report, I do believe that finance types can bring a basic
