Friday, January 8, 2021

Common Insurance Obstacles Nonprofits Face

The nature and business goals of nonprofit organizations are unique; therefore, their insurance coverage must be too. Nonprofits employ income-reliant individuals while also facing obstacles such as donor retention, stewardship, and volunteer liability all while championing for a worthy cause. And with different organizational goals also comes different requirements for insurance coverage. In order to provide the appropriate coverage, insurers must understand the key trends in the nonprofit sector as well as the individual needs of each nonprofit. In an effort to highlight the challenges faced, a report was published that surveyed 200 nonprofits about their biggest challenges when it comes to selecting insurance policies. Here are some of the top challenges faced.

FINDING THE RIGHT PRICE

While there are some nonprofits that have extremely high revenues and successful executives, they are not intended to make people rich. Just like a small business, one liability claim can wipe out an entire organization. Finding an affordable policy for a nonprofit that will also help it come out on top after a liability claim can be nearly impossible without the proper broker. On top of this, nonprofits face more risks due to the diverse settings in which they pursue their mission. Organizations that work with children, youth, and social services are seeing the sharpest increases in premiums due to a nationwide upsurge in claims.

According to the report, the number one reason that nonprofits will change their insurance provider is because of a significant price increase. To help mitigate the cost of coverage and give insureds more value for their money, insurers often give amenities to nonprofits. These services might include group purchasing discounts, background checks for prospective employees, and consulting services. Working with a broker who deeply understands your organizations specific needs is critical to securing the correct coverage for your mission.

UNDERSTANDING THE POLICY AND GETTING THE RIGHT COVERAGE

In order to understand what types of coverage to purchase, nonprofits must be aware of all their risks, which can vary depending on what types of populations they serve. The use of volunteers also brings different levels of liability exposure. Volunteers can be more prone to injury if they do not know proper procedures and typically possess less loyalty to the organization than a standard employee. These types of risks can be covered by General Liability Insurance to defend against third-party claims.

No two nonprofits have the same exposures, but a needed area of coverage for all organizations is Directors and Officers Insurance. Without D&O insurance, board members can be held responsible for funding lawsuits with their own personal assets. Forty-one percent of nonprofits indicated confusing policies as the reason they would not select a certain coverage, which is why partnering with a specialty broker who has experience working with nonprofits is critical to be properly covered.

RETAINING DONORS

Donor retention is a common issue for many nonprofits. Not only is it difficult to attract donors, it is even harder to keep them coming back. The coronavirus pandemic has only made this task more challenging, as all in-person fundraising events had to be made into virtual events where many organizations did not see the same turnout they had the year before. Recognizing this, insurers know that their nonprofit clients base a higher value on the integrity of their relationships than for-profit companies do. While an ever-changing market and other factors make it nearly impossible to determine a recipe for perfect coverage, insurers are working to identify specific trends that cater to the unique goals of those who fight for the greater good. And for that, we applaud them.

When looking for insurance for your nonprofit, it is especially critical to have a broker who specializes in nonprofit needs. Hawley and Associates thoroughly understands your operations and can clearly and effectively articulate your needs to insurers. We work by your side to navigate the insurance marketplace and secure the best coverage at a price your organization can afford. Contact us or request a quote to speak with one of our specialist brokers on how we can best protect your mission.

Wednesday, December 16, 2020

Five COVID-19 related policies and procedures your nonprofit should have in place

 

Crisis management is difficult even under normal circumstances, and with an on-going health crisis, it is even more difficult to predict what policies and procedures your nonprofit should have in place. If we have learned anything from the COVID-19 pandemic, it is that preparedness and resiliency against known risks and threats are essential, no matter the context.

Staff Leave Policies

You may want to review your sick time and personal leave policies. If you have not already done so, you will want to adjust this policy to reflect the requirements from the Families First Coronavirus Response Act.  This law provides two weeks of emergency paid sick leave, a subsequent ten weeks of partially paid family leave for childcare, and potential refundable tax credits for employers to cover some of the costs of the mandates. 

Remote Workers Policy

Working remotely has become commonplace in today’s work environment.  If you have workers working remote, your organization should already have some sort of policy in place.  A remote worker’s policy will be helpful in keeping your staff safe and ensure your business operations and services continue. Businesses looking to introduce a remote workers program should create specific guidelines to ensure all employees understand what is required from them when they work remotely.

Programs and Services

A policy like this should address how you will continue to offer the programs and services to those you serve. During COVID-19, this could include how your organization will address safety concerns and basic operational needs, as well as how to ensure you are giving accurate and timely information and instructions for those individuals and communities that need it. Consider how you will keep your employees, members, and clients safe, what this system will look like, and how you will communicate to staff, stakeholders, and your members.

Communication/Social Media Policy

This policy would focus on your internal and external communications, particularly with staff, stakeholders, the board of directors, and the community in which you serve. During this time, you may want to evaluate how you are providing information, including what is happening at your organization during the crisis and whether or not you are sending out external resources to keep your community informed as the situation continues to evolve. For a more detailed look at what this policy can entail, reference the Standards for Excellence Institute guide.

Cyber Security/IT

Since the start of the pandemic, there has been a spike in phishing attacks and ransomware attacks, capitalizing on the COVID-19 crisis.  Develop an understanding of the cybersecurity risks confronting your organization, including the risks to systems, assets, data, and capabilities. Cybersecurity training should be mandatory for everyone. Every employee must be aware of all types of threats. Individuals using a computer should know about basic password security and safe internal browsing practices.  Additionally, this policy should cover what resources you will need to make remote working sustainable.

Hawley & Associates understands that the effects of COVID-19 has altered the risk management profiles of many nonprofits.  There has never been a better time to review your insurance program – assessing the types and extent of protection you may have (or not have) for losses and claims related to the virus.

Wednesday, November 11, 2020

4 Steps in Preventing Gender Discrimination in the Workplace

Regardless of the progress that has been made over the years concerning gender equality in the workplace, most studies on the topic show that businesses and organizations still have a long way to go. According to a recent survey performed by the Pew Research Center, 42% of women in the United States claim that they have experienced some type of gender discrimination in the workplace, which can be an issue throughout the entire employment process, from the job interview to the exit interview or retirement.

The most common examples of gender discrimination in today’s workplace include failure to promote, unfair treatment, pregnancy discrimination, and receiving less support based on one’s gender – all of which are illegal and offensive,  much like any other type of discrimination, based on race, ethnicity, sexual orientation, religion, or age.

STEPS TO PREVENT GENDER DISCRIMINATION IN YOUR ORGANIZATION

The most effective way to keep your employees motivated to learn new things and grow with the organization is by making them feel safe and appreciated. A discrimination-free workplace is vital to achieving this goal. Here are a few steps organizations can take to ensure gender discrimination cannot and will not thrive in the workplace:

1.      ENHANCE TRANSPARENCY

Make the hiring and evaluation processes as transparent as possible by clearly identifying key milestones workers need to reach in order to qualify for senior-level positions. This is a great way to ensure your employees get promotions or pay raises solely based on their hard work and dedication.

2.      FAMILY-FRIENDLY INSURANCE PLANS

Build an honest, safe, and friendly environment for all parents, fathers included. Paid maternal leave as part of your family-friendly benefits package is great, but proper parental leave for both mothers and fathers is even better. Furthermore, covering your employees’ pregnancy-related health insurance is also a benefit that can make your organization very attractive to top talent.

3.      IMPLEMENT TRAINING

Sensitivity training will help organizations avoid complications and gender-based harassment or violence, as well as the lawsuits that can stem from these issues. Additionally, it’s imperative for your team to feel comfortable voicing their concerns and coming to executive leadership when looking for a solution. This kind of trust that is built in your organization will empower employees to be better at cooperating, communication, and performing their everyday tasks.

4.      ENFORCE ZERO-TOLERANCE POLICIES

The most effective way to prevent potentially hostile work environments, and lawsuits, is to draw clear lines and identify what types of behaviors that won’t be tolerated, regardless of the scenario. However, even if your organization takes legitimate steps towards preventing gender discrimination, it only takes one such incident to tarnish an organizations reputation and possibly lead to a very expensive lawsuit.

INSURANCE AS PROTECTION

Should your employees feel discriminated against and decide to bring a lawsuit, the legal expenses and reputational damage can be severe. Having the proper risk management program in place is critical in protecting against these possible expenses and damages, while business insurance allows the organization to transfer the financial stress and damage to a third party, the insurer. Having insurance that covers the financial aspect of such an undesirable situation allows your organization to deal with these types of allegations in a proper manner, with full attention for the employee’s dignity and safety.

In the event of a gender discrimination claim, the insurance policies that typically respond to these types of incidents would be either Employment Practices Liability Insurance (EPLI), or Directors and Officers Insurance (D&O). EPLI will respond to any employment claim, such as wrongful termination, failure to promote, or harassment based on an employee’s gender. The policy can cover both the legal costs to defend as well as settlements reached, or any fines imposed.

However, it’s not just the organization that is at risk for claims regarding gender discrimination. If employees who allege gender discrimination are not content with the way executive management responded to them, they make look to sue the organization’s officers personally. In such cases, EPLI will not protect the executives and board members of your organization. Having a D&O policy in place will help protect the personal assets of directors and officers and pay for both defense costs and damages that arise from such claims.

WHERE TO GO FROM HERE

The team at Hawley and Associates has a niche understanding on how to protect nonprofit and social service organizations from gender discrimination claims and other employment-related incidents. Our team will work alongside you to obtain the right coverage at the right price. Contact us to learn how we can better support your mission.

Thank you to our Veterans!