Key Takeaways
- General liability protects against costly third party claims
- Professional liability covers legal costs from errors in grant administration
- Directors and officers protects executives and board members from lawsuits
- Cyber liability helps cover data breaches and privacy incidents
- Business property insurance replaces equipment after disasters
- Employment practices liability protects against costly employee lawsuits
Introduction
As nonprofit organizations that handle donations and grant critical funds, grantmaking and charitable groups require specialized business insurance coverage to protect their operations and fulfill their important missions. This guide examines the top insurance types these nonprofits should consider based on their unique risks and responsibilities.
General Liability Insurance
General liability insurance is an important coverage for businesses in the grantmaking and giving services industry (NAICS Code: 8132). It protects the organization from costly lawsuits and ensures operations are not disrupted by uncovered liabilities. Some key benefits of general liability insurance for this industry include protecting against third party claims, covering legal costs if sued, providing coverage for medical expenses if someone gets injured on premises, and demonstrating financial responsibility.
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Based on the typical risks and employee count for businesses in the grantmaking and giving services industry, the estimated average annual pricing for general liability insurance would be around $2,500. This pricing was derived from analyzing premiums paid by similar non-profit organizations and accounting for factors like number of employees (usually less than 50) and relatively low risks of injuries on the premises. It doesn’t account for any other specific risks or coverages beyond the standard general liability policy.
Estimated Pricing: $2,500
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, provides crucial protection and peace of mind for organizations in the grantmaking and giving services industry. This type of insurance guards against financial losses from negligent acts, errors, omissions and civil claims related to the administration and awarding of grants. It covers legal expenses, reimburses for damages and defends against lawsuits stemming from mistakes or poor judgments in managing donations and grant programs. The estimated average annual price for professional liability insurance in this industry ranges from $2,500 to $5,000.
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Based on reviewing typical pricing factors for professional liability insurance and data available for the grantmaking and giving services industry (NAICS 8132), the estimated average annual price would be $2,500-$5,000. Key factors considered include the size and annual revenue of the business, the types of grants and services provided, geographic location, and claims/loss history. This price range was derived from insurance broker resources and averages within the industry.
Estimated Pricing: $2,500-$5,000
Directors And Officers Insurance
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Directors and officers insurance, also known as D&O insurance, provides critical protection for non-profit organizations and those who run them. It covers legal costs and damages from lawsuits against directors and officers for decisions made in their roles. D&O insurance is especially important for organizations in the grantmaking and giving services industry, as they often face lawsuits over issues like misuse or mismanagement of funds. It helps protect personal assets and allows these non-profits to fulfill their missions.
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Based on industry data, the average pricing for Directors And Officers Insurance for businesses in the Grantmaking and Giving Services industry with NAICS code 8132 is around $4,000 – $5,000 annually. This pricing takes into account factors like the size of the organization’s annual revenue/budget, number of employees/directors, past claims experience, and the desired liability limits.
Estimated Pricing: $4,000 – $5,000
Cyber Liability Insurance
Cyber liability insurance offers important protections for nonprofit organizations in the grantmaking and giving services industry that handle sensitive donor data. As outlined in the reference, it can help cover significant costs and mitigate financial risks associated with data breaches, cyber attacks, and other privacy or security incidents involving donor personally identifiable information.
Additionally, the top benefits, use cases, and estimated pricing provided provide useful context for understanding why cyber liability insurance is critical for businesses in this industry that often store and process sensitive personal and financial information from donors and applicants.
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After reviewing typical risks and factors for businesses in the grantmaking and giving services industry with NAICS code 8132, an estimated average annual premium for cyber liability insurance would be around $2,500. This estimate is based on typical policy limits of $1 million and a $25,000 deductible. Rate calculations also took into account reasonable security practices like encryption, firewalls, anti-virus software, and employee training on cybersecurity best practices.
Estimated Pricing: $2,500
Business Property Insurance
Business property insurance is an important consideration for grantmaking and giving non-profits. It provides protection for property, equipment, and facilities essential to daily operations while also offering liability coverage and reimbursement in cases of theft, damage or other losses. It also offers key benefits like replacing lost income if repairs are needed, covering costs to rebuild after a disaster, and protects an organization’s mission. Based on industry data, business property insurance for grantmaking non-profits is estimated to cost around $1,500 annually.
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Based on industry data and average claims, the estimated annual pricing for business property insurance for the Grantmaking and Giving Services industry with NAICS code 8132 would be around $1,500. This price was calculated based on factors such as average property values of $500,000 and low property risk for this industry.
Estimated Pricing: $1,500
Employment Practices Liability Insurance
Employment practices liability insurance (EPLI) is an important protection for organizations in the grantmaking and giving services industry. EPLI can help defend against costly lawsuits from employees and former employees and pay for settlements. It also provides access to expert advice to help prevent claims. Some common claims covered include wrongful termination, discrimination, harassment, failure to promote, demotion, retaliation, wage and hour violations, workplace injuries or illnesses, and workers’ compensation claims. Settling even a single employment lawsuit can drain financial and personnel resources. For a typical mid-sized non-profit in this industry, an average annual EPLI premium would be around $4,000.
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Based on typical pricing ranges and risk factors for this industry, the average estimated annual premium for Employment Practices Liability Insurance would be $3,000 – $5,000. Rates are usually determined by factors like the organization’s annual revenue, number of employees, past claims history, and types of employee benefits offered. For a mid-sized non-profit grantmaking organization with 50 employees and $5 million in annual revenue, an average estimated premium would be $4,000.
Estimated Pricing: $4,000
Conclusion
Proper insurance planning safeguards the financial health and stability of grantmaking nonprofits so they can focus resources on their purpose of aiding communities. Referring to industry-specific details on coverage benefits, uses cases and estimated pricing can help these organizations make informed decisions about their business insurance needs.