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Nonprofit Resources is a wholly owned Subsidiary of Colorado Nonprofit Association |
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Q. What is risk as it pertains to insurance and what should I be doing about it? A. Nonprofit organizations are natural risk takers. They develop programs to suit a variety of needs in their various communities, often with scarce funding and resources available. Progress is not possible with taking risk but nonprofits are accustomed to implementing the innovations necessary to grow an organization. Risk is a measure of the possibility of incurring loss or misfortune. If your organization is prepared for a wide range of possible outcomes (both downside and upside), your nonprofit faces less risk. Examples of risk might be that you have employees but no means to pay for a workplace injury; or on the upside, a donor wishes to bequeath funds but you are unprepared to demonstrate to that donor your organization's worth. Dealing with both types of risks are instances of strategic risk management and require an organization's commitment to the protection of assets and opportunities. Risk appraisal is a blend of brainstorming and list making. Identify both your probable and remote risks considering the culture, history, politics and environment of your group. After identifying your risks and prioritizing them, put your results into practice by considering the importance of training, safety equipment and tools, rules and requirements, staff screening and program design. Insurance is a risk-reducing investment in which the buyer pays a small fixed amount to be protected from a potential large loss and can be the most important component of your risk management program. How much uncertainty can you tolerate? Your post-loss goals may affect the amount of insurance you purchase. The greater the need for financial and program security will indicate more insurance while the willingness to accept greater loss will mean that less insurance is likely purchased. The more your organization's risk manager knows about insurance, the better, although few can afford enough time to become an expert. Remember that an insurance policy is a contract and it is very important to understand what you have purchased. A trusted and responsible professional will be able to assist you in understanding your policies. 50 Select an insurance professional that understands the special needs of nonprofit. Your program is unique and must be recognized as such. Make sure that your agent fully understands your operation so that he(she) can write your insurance coverage appropriately. The experts at Nonprofit Resources can assist you in assessing your risks and recommend insurance coverage that will protect your group in the event of a loss. Can we address one of your questions?
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iNews Articles 2010 