Non-profits are dedicated to serving their missions. They go above and beyond to protect and advance them. But for all the focus they put on helping others, they may not have a true focus on what they need to do to protect themselves.

"Unfortunately, many non-profits don't realize until it's too late that they have the same liability issues their for-profit counterparts have," says Paul Siragusa, Senior Vice President of Commercial Lines Underwriting. "Anything that a for-profit company can be sued for, a non-profit can as well. And, they may have additional risks to be concerned about, especially if they are in the human or social services sectors."

Considering that non-profits are the third-largest employment industry in the country, employ over 11 million people, and also use over 60 million volunteers, claims opportunities grow exponentially. That's why non-profits need to understand the types of coverage holes hidden from their view first before they can prevent risk exposure. But what types of exposures could they find?

Philadelphia Insurance Companies (PHLY) shares a list of ten real exposures and damages incurred by non-profits that illustrate just how widespread their risks are.

Could Any Of These Ten Exposures Happen To Your Non-Profit?

Professional liability, abuse/molestation, fundraising, discrimination, fiduciary liability, and more - these expensive real-life non-profit claims may be more common than you think.

1. Equipment Breakdown:

• Lightning struck a transformer pole, sending a surge into a building, which caused damage to some a/c units and computers.
• Loss:
  • $219,000
• Takeaway: Unexpected damage to a non-profit's building and equipment can occur at any time.

2. Environmental Damage from Groundskeeping:

• A condominium association applied fertilizer to the common areas around the complex. Unfortunately, the fertilizer washed into a neighbor's pond. The association had to restore the pond.
• Loss:
  • Remediation: $55,000
• Takeaway: Similar unfortunate, unplanned consequences could happen to anyone maintaining their own properties. However, non-profits that provide landscaping services to others through an integrated employment program could face significant additional liabilities.

3. Accident at a Special Event:

• During a special event sponsored by the insured, a participant exited a golf cart and fell backwards into the cart. The cart rolled down the road hitting a tree.
• Loss:
  • $1.75M
• Takeaway: Fundraising activities open up other far-reaching concerns about liability and safety measures for guests and staff.

4. Class Action Suit for Misrepresentation:

• Students filed a class action suit alleging their school's promotional material misrepresented one of its locations' accreditation. Damages included expenses for students to take additional classes for credit and loss of income.
• Loss:
  • $100,000
• Takeaway: Claims a non-profit makes about itself or its services could negatively impact others who depend on them if they're embellished or not true.

5. Termination and Retaliation:

• The chief financial officer terminated his executive assistant for sharing confidential information to other staff about upcoming layoffs. In response, the assistant sued the CFO for retaliation and sexual harassment, claiming the CFO made frequent suggestive comments and improperly touched her.
• Loss:
  • $150,000
• Takeaway: There are always going to be disgruntled employees who retaliate when action is taken against them.

6. Disability Discrimination after Medical Leave:

• An employee went on medical leave when ill. When it was time to return to work, he learned his position had been filled by someone else, and his job was no longer available. He filed suit for lost wages, emotional distress, and violation of disability discrimination statutes.
• Loss:
  • $100,000
• Takeaway: Someone will always challenge employment practices, whether the claim is valid or not.

7. Employee Improperly Using Funds:

• An Executive Administrator was using a company credit card for personal purchases.
• Loss:
  • $530,000
• Takeaway: A series of small losses can have a significant impact on an organization's financial health.

8. Privacy Breach Trash:

• An employee of a rehabilitation center improperly disposed of 4,000 client records, violating its privacy policy. The records contained social security numbers, credit and debit card account numbers, names, addresses, telephone numbers, and sensitive medical information.
• Loss:
  • Fines and penalties paid to the state along with $890,000 in customer redress funds for credit monitoring for the victims.
• Takeaway: Threats against privacy and information leaks are always in the news. But it's not always hackers and cyber security that non-profits need to worry about - it could be employee mishandling.

9. Workplace Violence:

• At a local senior center, a physical therapy counselor was attacked by an angry family member who blamed the counselor for sores and scars on his father's body. He claimed they appeared after a recent therapy session. The counselor suffered two broken ribs and multiple head injuries from the attack.
• Loss:
  • $55,000
• Takeaway: Unfortunately, although unpredictable, workplace violence has become a common threat.

10. Misappropriation of Funds:

• It was alleged that a grant-making foundation receiving private donations was using those funds for purposes not associated with its mission. A group of supporters sued the foundation's board for misappropriation of funds and breach of duty.
• Loss:
  • Over $1M
• Takeaway: Because of their unique missions, non-profits may come under scrutiny and suffer financial repercussions more often than they could imagine.

These ten real-life examples prove three things:

One: That claims can happen anytime, anywhere, and for any reason.

Two: In many instances, the hit to the non-profit's reputation can do incalculable damage if not handled correctly.

Three: For those organizations that suffered a large loss, the organization's costs far outweighed the insurance premiums - making it well worth the value for the protection provided.

Let Your Non-Profit Focus on Helping Others - and PHLY Focus On Helping You

The underwriters on the non-profit and human services team average more than 25 years of experience in the sector. Their experience is enhanced with PHLY's deep knowledge gained from covering more than 120 specialized niches.

PHLY's comprehensive non-profit insurance program is uniquely designed to fulfill a wide range of special insurance needs for the sector. PHLY offers:

• General Liability Coverage: Up to $1M each occurrence and $3M aggregate
  • For employees, volunteers, insureds
• Abuse and Molestation Coverage (with separate limits)
• Property Coverage
• Umbrella/Excess Liability Coverage
• Business Automobile Coverage for owned/non-owned/hired auto
• Crime and Fidelity Coverage (including Employee Theft)
• Directors + Officers Liability (D&O Liability) Coverage
• Professional Liability Coverage (with separate limits)
• A full suite of Risk Management Services, many available at no cost
• +33 additional coverages/extensions

When comparing these features with other insurers, you'll realize it's hard to find another carrier that understands non-profits as well as PHLY and that provides the specially tailored coverages that PHLY can offer.

Read more about Non-Profit Insurance from PHLY.

Peace of Mind From Risk Exposure

From equipment breakdown to misappropriation of funds: if even one of these ten exposures happens, it could make all the difference to a non-profit being able to serve its mission. Contact a PHLY rep today and make sure your non-profit has the liability insurance protection it deserves.