Commercial General Liability Insurance for NonprofitsAugust 9, 2012
At Dyste Williams, we advise many nonprofit organizations about liability issues. Most nonprofits are aware of the need for adequate Directors and Officers Liability insurance to cover their board members. Less well known is that even if a nonprofit has no assets or office space, it can still be sued for injury or damages and would need insurable resources for legal defense costs. Nonprofits are just as susceptible to lawsuits as corporate entities. This highlights the need for Commercial General Liability insurance for nonprofit organizations. Bodily injury and property damage incidents are specifically excluded from Directors and Officers Liability insurance.
Many nonprofits have staff members who work out of their homes when there is little or no leased office space for the organization. Often management thinks, “why do we need General Liability if there is no premises exposure?” In fact, nonprofits can be susceptible to lawsuits whether or not they lease office space or even have physical assets. Further, the nonprofit may not have the resources to compensate someone who has suffered harm due to the nonprofit’s operations.
Commercial General Liability protects the nonprofit organization itself from claims made against it for injury to an individual or damage to property. As an example, perhaps property damage occurs as a result of holding a meeting in a public place. In the event of a lawsuit, all parties would be named. Just because you are a nonprofit organization doesn’t mean you won’t be listed on the lawsuit. Lawyers tend to list as many parties as possible when an incident occurs.
Now imagine what would happen to your nonprofit if you had to hire an attorney to defend a lawsuit. Do you have enough assets to sustain this cost or would you be put out of business? These are important questions for the Board to consider. Protection from damage or injury claims is not covered in a typical Directors and Officers policy. This is why your nonprofit organization needs Commercial General Liability coverage. A Commercial General Liability policy is designed to cover defense costs as well as judgments. It is an essential part of the business insurance program we recommend for our nonprofit organization clients.
For more information about how Dyste Williams can help protect your non-profit with comprehensive liability insurance coverage, please contact Niki Poppa or Ted Dyste.