Insurance Risk Management Strategies for Nonprofits
Posted on May 19, 2015 8:00am PDT
In order to gain a reward, you will often be required to take some sort
of risk; when it comes to
nonprofit insurance in New York City, however, your risk should always be minimized. Insurance
for nonprofits can exist without the risk as long as you construct an
effective risk management strategy for your organization. Keep reading
to find out how you can create your own insurance risk management strategy
for a nonprofit organization.
Components of a Risk Management Strategy
Your risk management strategy will be designed to keep the risk of lawsuits
and liability as low as possible and keep you
covered in a number of ways. You may enlist the services of a broker, agent, or insurance company
or even a risk management consulting firm for help in designing your strategy.
Keep in mind that a risk management strategy does not stand in place of
an insurance policy; instead, your strategy can show insurers that your
organization is worth covering, and it encourages insurance agencies to
allow you to choose specific coverage areas at a reasonable price. Your
risk management strategy can help you determine which risks are more difficult
to avoid, which can help to shape your insurance policy.
Differentiating Myths and Facts
There are a few prevalent misconceptions about nonprofit insurance that
should be clarified before you construct your risk management strategy.
One important nonprofit insurance myth is that charitable immunity protects
nonprofit organizations from lawsuits. While this may have been the case
long ago, charitable immunity is no longer practiced. Some believe that
nonprofits should only concern themselves with general liability policy,
which is also untrue; the nonprofit insurance policies you purchase should
be based on the strengths and weaknesses highlighted in your risk management
strategy, which reflects the actual needs of your business.
Understanding Your Insurance Needs
A successful risk management strategy will minimize the risk of your nonprofit
organization, but you will need the safety net of insurance. Assess your
risk management strategy and determine where the risk remains high; these
are the areas where you will need nonprofit insurance in order to make
sure that your organization stays covered.