Partnership is Powerful
Call Today!
800-244-9046

Nonprofit Insurance

There are numerous and diverse exposures facing nonprofit organizations presented by corporate governance and professional service delivery; below we have outlined a variety of coverage forms that have emerged to address such exposures. It should be noted that while the policies covering corporate governance and professional service exposures often overlap, the exposures themselves are quite different. Your GHM agent is always on call to answer specific questions relating to your nonprofit and its myriad exposures.

“Miscellaneous Professional” Mislabeled and Mishandled

Commercial General Liability, Commercial Auto, and Commercial Property products are the basic coverages purchased by most nonprofits. Insurance brokers and risk managers operate fairly comfortably when working with these types of policies. In stark contrast, specialized coverages for the activities of counselors, paraprofessionals, teachers, and volunteers, including volunteer board members, are another matter. Such policies are often manuscript forms that include in their titles the words "professional" or "miscellaneous professional" to describe coverage provided for the errors or omissions of professionals or paraprofessionals. Many brokers and nonprofit managers incorrectly assume that this type of policy is necessarily the same as an "Association Professional Liability" policy that might well include coverage for the actions of directors and officers. Assuming that "Miscellaneous Professional" and "Association Professional" policies provide even remotely the same coverage is a big mistake. The label attached to the coverage form provides little insight into the covered exposures.

To sort out the issues surrounding Directors' and Officers', Association Professional, and Miscellaneous Professional policies, it is important to clearly understand the differences between two exposures: corporate governance, and the delivery of professional and/or paraprofessional services. It’s critical to understand the distinction. 

Corporate Governance

This refers to the decisions and actions of the nonprofit's board of directors during the course of providing leadership for the organization.

Professional and/or Paraprofessional Service Delivery

This refers to services that a nonprofit provides to its clients. Professional service occupations have traditionally referred to medicine or law, although the term is now used to describe other professions that require less extensive education or credentialing such as teaching, social work and counseling. Paraprofessionals, with few or no formal credentials, such as peer counselors, may also be included here. Although the policies covering these exposures often overlap, the exposures themselves are quite different.

Directors and Officers

Nonprofit directors and officers may have an even more demanding job than their for-profit counterparts, because the affairs of the organization may be less familiar to the individual and may be conducted under less efficient conditions than in business corporations.

Damages recoverable from directors and officers of even a relatively small nonprofit organization can easily exceed the net worth of many individuals.

A surprising number of persons unknowingly face nonprofit D&O liability exposure. It is estimated that approximately 20 percent of all U.S. corporations are nonprofit, thus indicating an extremely large number of nonprofit directors and officers. A significant percentage of these individuals are not business persons with experience as a director or officer, nor do they have knowledge of their legally recognized responsibilities and duties.

Regardless of organizational structure, directors and officers of all nonprofit organizations share certain common responsibilities which, if not properly discharged, may give rise to personal liability.

Key features of D&O liability policies may include:

Broad definition of insured: D&O liability policies cover all directors, officers, employees, including staff, volunteers and committee members.

Employment practices coverage: D&O liability policies help protect all insured persons of the organization against damages from claims for wrongful termination, sexual harassment, discrimination and unfair hiring/firing practices.

It should be noted that these policies are not standard in form, and, consequently, coverage does vary from one carrier to the next.

 

FAQs

T: 800-244-9046
F: 866-274-0005
51 Main Street
Waterville, Maine 04901
Get Directions
34 Center Street
Auburn, Maine 04210
Get Directions
Need to Make a Claim?

Acadia Insurance
800-244-9446

Allstate
Report Online
800-255-7828

Dairyland Insurance
Auto: 800-225-1390
Cycle: 800-325-9559

Foremost Insurance Group
Report Online
800-527-3907

The Hanover Insurance Group
Report Online
800-628-0250

The Hartford
Report Online
800-243-5860
Business Insurance: 800-327-3636

Jewelers Mutual Insurance Company
Report Online
800-558-6411

MEMIC
Report Online
800-636-4292

MMG Insurance
888-343-0533 (M-F, 8:00-4:30)
888-869-8700 (after hours)

Patriot Insurance Company
Report Online
866-460-1776

Patrons Insurance
800-542-7032

Peerless Insurance
800-522-7152

Philadelphia Insurance Companies
800-873-4552

Progressive
Report Online
800-776-4737

Travelers
Report Online (Personal)
Personal Insurance: 800-252-4633
Report Online (Business)
Business Insurance: 800-832-7839

Union Mutual of Vermont
Report to GHM: 207-873-5101

Want to Pay a Bill?

Acadia Insurance 
Call GHM: 800-244-9046

Allstate
Pay Online
800-901-1732

Dairyland Insurance
Auto: Pay Online
Auto: 800-2334-0090
Cycle: Pay Online
Cycle: 866-324-7952

Foremost Insurance Group
Pay Online
800-532-4221

The Hanover Insurance Group
Pay Online
800-573-1187

The Hartford
Pay Online
800-624-5578

Jewelers Mutual Insurance Company
800-558-6411

MEMIC
Pay Online
800-660-1306

MMG Insurance
Pay Online
888-664-2455

Patriot Insurance Company
Personal: Pay Online
Business: Pay Online

Patrons Insurance
Pay Online
866-611-7887

Peerless Insurance
Pay Online
800-228-7830

Philadelphia Insurance Companies
Pay Online
877-438-7459

Progressive
Pay Online
800-776-4737

Travelers
Pay Online
800-842-5075

Union Mutual of Vermont
Pay Online

 

Frequently Requested Forms

Coming soon...