Buying insurance is no one’s favorite activity so avoidable mistakes occur frequently. Some of the most common mistakes are:

1. Assuming that a general liability policy covers volunteers. Standard insurance policies cover the organization and its employees. Volunteers usually need to be added by endorsement.
2. Switching carriers each year to save a few dollars. A stable, long-term relationship has many advantages when the insurance market changes or the organization files a claim.
3. Working with an agent, broker, or carrier unfamiliar with volunteer organizations. Insurance professionals who understand volunteer programs offer big advantages. They can effectively market your account to underwriters and provide value-added services to your organization.
4. Using an insurance agent or broker who also servesice on your board. Avoid this conflict of interest by asking your insurance advisor to step down from your board or find a new advisor. Having access to an independent insurance advisor is essential to fulfilling your fiduciary duties to your organization.
5. Expecting a general liability policy to cover employment-related claims. The bodily injury or property damage coverage of general liability insurance rarely applies to these claims. A directors and officers (D&O) policy that includes key staff can provide the proper coverage.
6. Buying an inexpensive D&O policy that does not cover employment-related claims. A low premium may be attractive, but failing to get adequate coverage makes these policies a bad bargain.
7. Assuming volunteer protection laws eliminate the need for D&O insurance. The protection applies only to volunteers’ personal liability; the liability of the organization itself is not affected. Claims can still be filed, requiring a legal defense.
8. Having no coverage for injured volunteers. Volunteers usually aren’t covered by workers’ compensation and may not be able to collect against a general liability policy. Consider an accident policy or adequate medical payments provision in a general liability policy.
9. Ignoring non-owned auto liability. Accidents caused by volunteers using their own vehicles – or other vehicles the organization does not own – are one of the most common and expensive sources of claims against volunteer programs.
10. Purchasing a “premises policy” that limits coverage to incidents that occur at the office. Such policies are inadequate for organizations with field staff or that conduct activities, like fund-raisers, off site.

Get additional information on any of these topics from Nonprofit Resources, the nonprofit insurance experts, by calling 303-894-0298 or 866-537-1142, or sending a request via the web site.