Do We Need General Liability Insurance?

There’s a pretty easy answer for this one – YES. According to my friend and insurance broker Tom, basically ALL nonprofits (and for-profits for that matter), no matter the size, location or mission, should have general liability insurance.

First, what is general liability insurance?

Basically, a general liability insurance policy gives coverage for others’ bodily injury or property damage. ALL nonprofits need it – anytime you’re out in the world for anything to do with the company, things can happen.

Maaaaybe if a company is run by a total hermit who never goes anywhere or sees anyone, you can imagine a situation that general liability insurance isn’t needed. But, that’s definitely not common, and pretty much impossible for a nonprofit, right? Nonprofits need to be pursuing their mission and serving the PUBLIC, so it’s pretty unlikely that the hermit thing can happen.

The reality is, whenever you (or your board, staff, or volunteers) are out in the world, mistakes can happen. For example, say a church holds services each week, and a worshipper trips on the stairs on her way out. Even if the church doesn’t own the building, it can be held liable.

Pay a little now for general liability insurance so that a freak accident doesn’t sink the nonprofit.

But none of our people would ever sue us!

This is something I hear all the time. When you start out and know all the people you’re working with, it’s pretty hard to believe anyone is going to sue the nonprofit, even if something happens.

But there’s something called “claim subrogation” to keep in mind. Basically, it might not be the person’s choice whether or not to sue. Their insurance company might be the one to make that choice, with or without their consent. It makes sense – if the insurance company is going to lose money, it’s going to try to recover that loss, no matter what you might want.

No matter how loyal and good-hearted your people are, general liability insurance is always a good idea. It’s always better to prepared for life’s not-so-pleasant surprises that might come up.

So, now what?

If you don’t have a general liability insurance policy, you’ll want to look into getting one. And pro tip – getting the cheapest one isn’t always the way to go. You want it to ACTUALLY COVER your activities.

So, get a good insurance agent and take the time to talk about the nonprofit’s budget and needs. Together, you’ll be able to find something that works for the nonprofit AND provides the protection it needs. If you’d like to work with Tom (go do it, he’s the best!), learn more here. Or if you want to chat more about all this, schedule a member consult!