According to the latest data from the 2013 Nonprofit Risk Survey, American nonprofit organizations are both unprepared and under-insured against risks.
This important survey was conducted by Crystal & Co., a worldwide insurance advisor and was developed to reveal trends in the risk awareness and exposure of U.S. nonprofit organizations.
The survey participants were 100 senior executives of U.S. nonprofit organizations with at least $20 million in annual revenue.
Survey questions were mostly about risk identification and priorities within the organization, the strategic and operational challenges they face, and their insurance purchasing patterns.
The study revealed just how unprepared nonprofit organizations are:
- 22% of them have a dedicated risk manager in place, and over three-quarters (78%), have not employed a dedicated risk manager
- 52% assigned the responsibility for their risk and insurance to their finance department
- 48% chose to assign the risk and insurance responsibility to their human resources, operations, or legal departments
- 36% said they assessed their risk within the past year and 7 percent stated they had never done an independent assessment of any kind.
Respondents said the top three hazards their nonprofits face are: “Employment-related risks, including workplace injuries”, “Acts, errors or omissions in governance and management” and “Acts, errors, or omissions in rendering professional services”.
These nonprofits seem to have no problem seeking insurance guidance from a trusted advisor, but they did state that their advisor should have a deep understanding of their particular sector and company, provide advocacy, and have strong market relationships.
It's known that Directors & Officers liability insurance is the most prominent insurance type purchased by nonprofits, followed closely by Errors & Omissions liability, Employment Practices liability and Commercial General Liability.
Make sure that your nonprofit organization is protected by at least one of these policies -- contact our licensed professionals today to see how we can help protect your organization's assets: email@example.com or call 201-847-9175.