Nonprofit
Insurance

Volunteers are the lifeblood of most nonprofit organizations, and protecting these volunteers, as well as protecting the organization from liability arising from volunteer activities, is a critical insurance consideration. Nonprofit organizations in Delaware, Pennsylvania, New Jersey, Maryland, and Virginia rely on volunteers for fundraising events, community programs, youth activities, food distribution, habitat restoration, mentoring, and countless other activities.

Volunteer accident coverage provides medical expense benefits for volunteers who are injured while performing authorized volunteer activities for the organization. Unlike workers compensation (which covers employees), volunteer accident insurance is not mandated by law but is considered a best practice for organizations that depend on volunteer labor. Coverage typically includes accident medical expense benefits ($10,000 to $50,000 per volunteer), accidental death and dismemberment benefits, and excess medical coverage above the volunteer's personal health insurance.

General liability coverage for nonprofits extends to volunteer activities, covering bodily injury and property damage claims by third parties arising from volunteer actions performed within the scope of their authorized duties. If a volunteer accidentally injures a member of the public or damages property while performing volunteer work, the organization's general liability policy responds to the claim.

Special event insurance is essential for nonprofits that host fundraising galas, charity runs, community festivals, auctions, golf tournaments, concerts, and other events. Event liability insurance covers bodily injury to attendees, property damage at the event venue, and, if applicable, liquor liability for events serving alcohol. Many venues, hotels, convention centers, parks, and community facilities, require event insurance with specific limits and additional insured endorsements before permitting the event.

In Delaware, special event insurance is commonly required for events held at state parks, public facilities, and privately owned venues. Pennsylvania, New Jersey, and Maryland have similar venue insurance requirements. Our appointed carriers offer special event liability policies with coverage for single events or annual event programs. Premiums depend on the event type, expected attendance, activities involved, and whether alcohol will be served. A small charity gala for 200 guests might cost $300 to $800 for event insurance, while a large outdoor festival could cost $2,000 to $5,000.

Prominent Insurance Services helps nonprofits secure event insurance for individual events or annual event programs, ensuring every fundraiser, community event, and special program is properly insured.

Nonprofit organizations that serve children, youth, vulnerable adults, or disabled populations face a critically important coverage need: abuse and molestation liability insurance. This specialized coverage protects the organization against claims alleging physical, sexual, or emotional abuse perpetrated by employees, volunteers, or participants in the organization's programs.

Standard general liability policies typically exclude or severely limit coverage for abuse and molestation claims. Without a dedicated abuse and molestation endorsement or policy, a nonprofit facing such a claim would have no insurance coverage for defense costs, settlements, or judgments, exposures that can easily reach hundreds of thousands or millions of dollars.

Organizations that should carry abuse and molestation coverage include youth-serving organizations (mentoring, tutoring, scouting, youth sports), childcare and after-school programs, religious organizations and houses of worship, summer camps and recreational programs, organizations serving adults with disabilities, elder care and adult day programs, and residential treatment facilities.

In Delaware, Pennsylvania, New Jersey, Maryland, and Virginia, mandatory reporting laws require certain professionals and organizations to report suspected child abuse. Failure to report can result in criminal penalties and civil liability. Abuse and molestation insurance covers the organization's defense costs even when the claim is ultimately unsubstantiated, providing crucial financial protection during what can be a lengthy and expensive investigation and legal process.

Our appointed carriers offer abuse and molestation coverage as an endorsement to nonprofit general liability or D&O policies, with limits typically ranging from $100,000 to $1,000,000 per occurrence. The cost depends on the organization's programs, participant demographics, screening and supervision practices, and claims history.

Employment practices liability insurance (EPLI) is equally important for nonprofits that employ staff. EPLI covers claims of wrongful termination, discrimination, harassment, retaliation, and wage-and-hour violations. Nonprofits are not exempt from employment laws, and the perception that charitable organizations are less likely to be sued for employment practices is incorrect. In fact, nonprofits may face heightened scrutiny because they are entrusted with public funds and charitable donations. EPLI protects the organization's financial resources against employment claims that can cost $50,000 to $200,000 or more to defend, even when the organization prevails.

Fundraising activities create unique insurance exposures for nonprofit organizations. Whether your organization conducts direct mail campaigns, online crowdfunding, peer-to-peer fundraising, charity auctions, golf tournaments, or major donor solicitations, there are liability and compliance risks that require appropriate insurance coverage and risk management practices.

Charity auction insurance covers the organization's liability for items sold at live or silent auctions, including donated goods, gift certificates, vacation packages, and experiences. If an auction item causes injury or damage (such as a donated piece of equipment that malfunctions), the organization could face product liability claims. Event insurance with product liability coverage addresses this exposure.

Donated vehicle programs, where individuals donate cars, trucks, boats, or recreational vehicles to the organization for resale or use, create auto liability and property exposure. The organization should carry garage-keeper's liability for stored donated vehicles, commercial auto coverage for any vehicles used in organizational operations, and ensure proper title transfer and registration to limit ongoing liability after vehicles are sold or disposed of.

Grant compliance is a critical concern for nonprofit organizations that receive government grants, foundation grants, or corporate grants. Many grant agreements include insurance requirements that mandate specific coverages and limits as a condition of funding. Common grant insurance requirements include general liability with minimum limits of $1,000,000 per occurrence, professional liability or E&O for organizations providing professional services, workers compensation with statutory limits for all employees, fidelity bonds for employees handling grant funds, and commercial auto for organizations using vehicles in grant-funded programs.

Federal grants under the Uniform Guidance (2 CFR Part 200) require organizations to maintain adequate insurance coverage and may include specific bonding requirements for employees with access to grant funds. State grants from Delaware, Pennsylvania, New Jersey, Maryland, and Virginia may have additional state-specific insurance requirements. Failure to maintain required insurance can result in grant disqualification, repayment obligations, and disbarment from future grant funding.

Prominent Insurance Services works with nonprofit organizations throughout the Mid-Atlantic region to ensure their insurance programs meet all grant requirements, donor expectations, and regulatory obligations. We provide comprehensive insurance reviews, certificates of insurance for grant compliance, and ongoing coverage management to support your organization's mission and funding strategy.