What, Why, and How: Insuring Nonprofits and Social Services

Insurance is a necessity for everyone including all businesses and community organizations. Nonprofits and social service agencies make up a big chunk of the market. Here’s what you need to know about exploring opportunities in writing nonprofit clients, the different types of nonprofits and social services entities, how to sell to them, and typical exposures.

Nonprofit and social services organizations are in every community. They make up more than a million organizations nationally, and the list keeps growing. Most of these organizations operate through a managing director and financial director who report to a board of directors made up of members in the community. They need insurance and an agent who understands the right type of coverage for the organization and the ability to vouch for those needs to the governing board.

How to Sell to Nonprofits and Social Service Agencies

Start by identifying and putting together a list of the nonprofits in your community. You can research organizations through different sources, for example:

  • Chambers of commerce
  • Personal networks

Just like when dealing with an individual as a client, it is important to understand the main mission of each nonprofit you want to work with and get to know more about it. This is a great way to establish trust and learn which recommendations will be most beneficial.

Why You Should Add Nonprofit Clients to Your Book of Business

  • Target Audience: There are many local nonprofits.
  • Opportunity: Nonprofits may be overlooked by other brokers.
  • Need: These organizations are required to carry insurance.
  • Customer Service: Nonprofits need a trusted broker.

Nonprofits in every community have a unique set of needs that differ from commercial businesses, and they may get overlooked by competing brokers. Due to their specialized insurance needs and limited access to resources, nonprofits may be more likely to seek out a trusted advisor (broker) than other segments of the insurance-buying market. Because of the unique exposures nonprofits face, they are required to carry insurance to protect their assets.

Typical Exposures

Nonprofits have a long list of potential exposures and insurance related concerns including, but not limited to:

  • Financial problems
    • Negligent client care by employees and volunteers
    • Property damage
    • Auto accidents
    • Vicarious liabilities
    • Mismanagement of employee benefits
  • Risk management
    • Employee hiring and screening procedures
    • Fundraising activities and events
    • Contracts
  • Special risks
    • Child care
    • Abuse exposures
    • Housing and zoning laws
    • Security

Depending on the nature of the nonprofit or social service, the types of risks and exposures can vary and tend to be unique to each organization.

Types of Nonprofits and Social Services

Here are some examples of nonprofits and social services that could be in your area:

  • Boys and girls clubs
  • Religious organizations
  • Recreational organizations
  • After-school programs
  • Family crisis centers
  • Animal protection organizations
  • Back-to-work programs
  • Food banks
  • Drug and alcohol rehabilitation facilities

If you are interested in exploring insurance opportunities in the nonprofit and social services market, MiniCo can help get you started. MiniCo is the leading source for insurance solutions and nonprofit intelligence for brokers and advisors. Our MiniCo NIF Nonprofit Social Services Insurance program offers over 35 years of specialized underwriting experience in this market and backing by an A.M. Best “A” rated admitted carrier. Visit our product page to learn more or contact an underwriter at nonprofit@minico.com.

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