Understanding Nonprofit Professional Liability Insurance
Professional Liability insurance for nonprofits, also known as Errors & Omissions (E&O) insurance kicks in when your nonprofit is sued for professional negligence. Being sued for professional negligence means your advice or a professional “mistake” caused someone harm. If you are found liable, and you are not carrying nonprofit E&O insurance, well it could be more than your nonprofit can handle.
For example, you run a nonprofit helping your community with business skills. You and your volunteers spend their time helping others build a resume, apply for jobs and learn key business programs. One of your volunteers coaches a community member on an interview, which in turn was bad advice and the member didn’t get the job. The community member could sue your nonprofit for negligence or that you failed to perform your duties. Regardless of you or your volunteer’s intention, it’s important to have the proper protection in place in the even that a lawsuit occurs.
While you can operate legally without Professional Liability insurance, you will run into some client contracts that will require you to carry E&O. It’s better to have the policy in place sooner rather than later, as most policies have a “claims-made” coverage. This means that your policy must be active when the incident occurred in order to take advantage of your coverage.
It’s important to discuss you options with an experience agent, who understands the needs of your nonprofit. The experts here at Raley Watts and O’Neill can craft a customized solution to ensure your nonprofit is protected and continues to bring good to the community.