Insurance experts say that there is still gap in the coverage of nonprofit organizations. They often stick to the existing agents and brokers, thus leaving certain areas in the operations uninsured. The gap can be filled by new agents. Actually, the market for non-profit organization insurance remains very competitive.

Agents who plan to write non-profit or social services need to consider several aspects that may change the landscape in 2017. They include possible change in the government regulations, emerging needs such as cyber-related liability coverage, and potential financial hardships.

What May Change Non-Profit Organization Insurance

Property/Casualty Market

The market for property/casualty insurance market for nonprofit sector remained competitive at the end of 2016. It is expected to remain so in 2017 this was confirmed by Sheila Shaw, a senior vice president for human and social services programs. However, changes begin to be evident during January 2017. Sheila said that the increasing rate for commercial insurance has affected the non-profit organization insurance, as both are actually related.

According to Shaw, P/C market for nonprofit sector remains profitable, except for non-profit organizations that really focus on transportation sector such as rural and emergency transportation. In other words, “general liability is still very profitable,” she said.

Cyber Liability

Finance experts say that cyber liability is mostly uninsured in non-profit organizations. Shaw said that those organizations really need this coverage. Like the commercial organizations, the non-profit organizations are increasingly dependent upon internet-based activities, such as online fundraising and web-based charity. Donations for social services may come from different countries and even different continents. That is why cyber liability insurance is increasingly important.

Employee Coverage

Non-profit organizations frequently overlook this aspect. Their activities depend very much on donations. When funding gets cut, the organizations may need to cut several programs, reduce risk management practices, and even cut the number of staff. During the funding cuts, the organizations may face dangerous situation, in which they have to survive and cope with financial hardships.

In fact, social workers are reimbursed based on the services they deliver. In case of funding cuts, non-revenue generating positions, such as safety directors or training directors, may not be reimbursed. The organizations may not have enough funding to conduct staff training or do driver safety programs,. As a result, Such positions will be the first to be cut off when the organizations are in financial trouble.

Government Policy

The non-profit organizations may be severely affected by the government policy. For instance, when Trump administration set the plan to change the Medicaid, funding cuts for the non-profit organizations might be the result. If this is the case, social and health services, which rely upon the Affordable Care Act, can be in trouble. They include addition treatment programs handled by non-profit agencies.

Shaw suggests that non-profit organizations, including the smaller ones, work with insurance agents to make sure that the gaps are filled with the right non-profit organization insurance. This is a good strategy from the risk management perspective. The agents or brokers can guide them in choosing the right coverage and in managing operations.