How to Choose the Right General Liability Insurance for Your Nonprofit

Choosing the right general liability insurance for your nonprofit is crucial to protecting the organization from potential legal and financial risks. This policy provides coverage against claims of bodily injury, property damage, or personal injury that might occur during your nonprofit’s activities or events. With so many options available, here are key factors to consider when selecting the best coverage for your nonprofit: 

1. Evaluate Your Risks 

Start by assessing the specific risks your nonprofit faces. Do you host frequent events? Do volunteers interact with the public?  Are volunteers and employees trained to know the signs of abuse?  Understanding your exposures helps determine the coverage you need. For example, nonprofits that hold large gatherings or work with vulnerable populations may need higher limits.  

2. Consider the Policy Limits 

Policy limits dictate the maximum amount your insurer will pay in the event of a claim. It's essential to choose limits that will adequately protect your nonprofit’s assets. While it might be tempting to opt for a lower limit to save on premiums, this could leave your organization vulnerable if a significant claim arises. Many nonprofits opt for higher limits to provide more robust protection, especially in our litigatious environment. 

3. Review Exclusions and Coverage Options 

Carefully review what is included and excluded in the policy. Some general liability insurance policies may not cover certain activities, like fundraising events or the use of third-party contractors. Make sure the policy aligns with your organization’s specific needs and activities. You can also explore additional coverages to fill in any gaps, such as coverage for volunteers or special events. 

4. Compare Premiums and Deductibles 

Balancing premium and deductibles is essential. While a lower premium might seem attractive, it could come with a higher deductible, meaning your nonprofit would pay more out of pocket if a claim is filed. 

By evaluating these factors, you can choose the right general liability insurance policy that provides adequate protection without compromising your nonprofit’s budget. 

Allison Hammons, CIC, CPIW, is a risk consultant for Knight Insurance Group.  

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