Not-For-Profit Insurance
A not-for-profit organisation is a legal entity that uses its profits for a set target. As a result, any income generated is used solely for maintaining the organisation and achieving these goals. Such aims could include:
Raising awareness and money for certain rare illnesses.
Building recreational centres for teenagers to use.
Soup kitchens or religious organisations like Churches.
If you would like to read more information or learn more about the pricing of business insurance, you can do so here .
An example of a not-for-profit is a charity, which operates only for its stated purposes and has to use the money to achieve this goal only. Not-For-Profit Insurance is still necessary for these organisations because profits should be maximised to improve the community, and as such, any form of cover assists in doing so.
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Types of Not-For-Profit Insurance
A not-for-profit organisation needs a range of covers to create a bespoke policy.
Public liability insurance
Public liability insurance is an example of a cover that an organisation needs because many accidents could hurt public members and result in the company’s financial strain. For instance, if an organisation set up a sports day to raise awareness for muscular dystrophies, hundreds of people could show up and want to partake in the activities. If someone trips during the three-legged race and twists their ankle, they could need urgent medical attention and also want to sue the organisation for causing their injury.
Public liability insurance would compensate the organisation for these expenses because they are covered in the policy. So money is saved and can be used instead to further the company agenda. Similarly, if there was a juice stand at the sports day and one of the workers spilt the beverage on one of the public members when handing it to them, the cover would compensate them for this damage.
2. Business building insurance
Business building insurance can be helpful for a not-for-profit organisation like charity shops that need a commercial space to run. The income made for this business must be used only to pay the rent of the space, pay the heating and lighting bills, and the profit would be given to the charity the business runs for. This means that any money for repairing the building if it was destroyed would be taken from the money for maintaining the business and could be detrimental and even cause the shop to close.
With insurance, the costs of repairing any damage caused by natural disasters like fires or floods, or even vandalism, would be covered. Some insurers even include temporary alternative accommodation to operate the shop whilst repairs are in place not to lose revenue.
3. Cyber insurance
Cyber insurance is recommended for a not-for-profit organisation because as all businesses move their data online to make it more secure, hackers always risk stealing sensitive client information and using their financial information to commit fraud. Organisations often keep lists of names and addresses of people that have donated to the cause and sometimes even their financial records.
If this happens, lots of money must be spent on IT experts to retrieve any lost information and notify the customers that they have had their information compromised. In addition, the software must be replaced and depending on the number of computers the organisation uses. This could end up being incredibly costly. Cyber insurance covers all of this and gives advice, and usually provides 24/7 customer support lines to prevent these accidents from at all.
4. Employers’ liability insurance
Employers’ liability insurance is compulsory as stated by the 1969 Employers’Employers’ Liability Act, and so must be obtained; unless the not-for-profit organisation is a sole trader or family-run business, this cover is necessary. Essentially, it safeguards workers if they are harmed or suffer from a long-term illness that gradually affects their health over a long period. If the employees are in the shop and trip on a loose floorboard or are at one of the fundraiser events and fall and injure themselves, this cover will compensate them for any medical expenses.
It will also help the company with any legal fees for hiring legal representation if the worker decides to sue them for being responsible for the said injury. This cover should be a minimum of £5 million but can go up to £10 million. In comparison to the premium prices, which can be as low as £61 per year, this is a brilliant risk management strategy to minimise the fallout of such accidents.
Not-For-Profit Insurance – To Conclude
In conclusion, not-for-profit insurance is favourable because the income generated can be utilised to help vulnerable people, and finances should be managed wisely. Whilst insurance cannot help decrease the risk of an accident occurring. It can help lessen the financial toll it typically takes on such an organisation.
Find out more about the importance of insurance here .
Other useful links about Business Insurance:
Maltings Insurance
Modus Landlord Insurance
Locksmith Insurance
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