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Nonprofit Insurance – The Basics
Presented by: Colleen Lazanich, CIC CRM with Debra Chargois-Butler •
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www.CalNonprofitsInsurance.org • 888.427.5222
About CalNonprofits California Association of Nonprofits (CalNonprofits) is a statewide membership organization that brings nonprofits together to advocate for the communities we serve. About CalNonprofits Insurance Services (CIS) CIS is a wholly-owned insurance subsidiary operating since 1984, providing risk management and insurance coverages to thousands of California nonprofits. •
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www.CalNonprofitsInsurance.org • 888.427.5222
Agenda Most Common Risks What is Insurance and Why do I need it? Insurance Coverages Property/Casualty Employee Benefits How to Shop for Insurance Resources •
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www.CalNonprofitsInsurance.org • 888.427.5222
Most Common Risks Injuries to clients, employees, volunteers, and the public Damage to property Failure to provide services Employment practices Theft/Fraud Legal/contractual requirements Unique to your operations Risk has possibility of either loss or gain. •
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www.CalNonprofitsInsurance.org • 888.427.5222
Managing Risk Identify the risks Transfer/Share the risk Insurance Company Contractual Transfer (Mutual aid agreements) Waivers Mitigate or reduce risks Risk Management programs (safety programs, inspections, committees, etc) •
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www.CalNonprofitsInsurance.org • 888.427.5222
Property/Casualty Insurance Commercial General Liability Property (Inland Marine, Catastrophe, Equipment Breakdown) Automobile Liability (Hired/Non-Owned Auto) Professional Liability (Errors & Omissions) Sexual & Physical Abuse/Molestation Directors & Officers Liability Cyber Security Liability Excess/Umbrella Liability Workers’ Compensation •
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www.CalNonprofitsInsurance.org • 888.427.5222
Liability Coverages Commercial General Liability – covers bodily injury and property damage to third parties. Usually includes Personal Injury, Advertising Injury, Medical Payments, and Employee Benefits Liability Professional Liability (Errors & Omissions) – covers errors in providing or failing to provide professional services Sexual & Physical Abuse/Molestation – covers bodily injury due to sexual or physical abuse Directors & Officers Liability – covers decisions made by the board of directors or other covered officers. Can include Employment Practices Liability Cyber Security Liability – covers damages caused by hackers or other breaches of confidential information Excess/Umbrella Liability – provides higher limits of coverage above other policies Workers’ Compensation – required by law to protect employees from injury, illness or death on the job, can also include volunteers •
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www.CalNonprofitsInsurance.org • 888.427.5222
Property Coverages Property Coverage – covers your assets – buildings, business personal property and business income Inland Marine – covers mobile property or property that needs enhanced coverage – computer equipment, signs, theater equipment, cameras, accounts receivable, valuable papers, etc... Crime – Employee Dishonesty (Fidelity), Fraud, Monies & Securities, Robbery/Burglary Equipment Breakdown – covers mechanical breakdown of equipment – also called Boiler & Machinery Catastrophe Insurance – Earthquake, Flood, and Difference in Conditions coverage. •
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www.CalNonprofitsInsurance.org • 888.427.5222
Automobile Coverages Auto Liability – covers bodily injury or property damage caused by ownership or use of autos Medical Payments – covers medical bills regardless of fault for driver and passengers – will not cover if Workers’ Compensation applies Auto Physical Damage – covers physical damage to the scheduled vehicles – Collision and Other Than Collision Hired Auto – covers liability for vehicles that are rented/borrowed (not from employees or volunteers) – can include physical damange Non-owned Auto – covers the agency’s liability for vehicles that are operated/owned by employees or volunteers Optional Coverages – Rental Reimbursement, Towing, Volunteers as Insureds, Drive Other Car •
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www.CalNonprofitsInsurance.org • 888.427.5222
Employee Benefits Insurance Group Medical Insurance Group Dental/Vision Insurance Group Life Insurance Group Disability Insurance Group Acupuncture/Chiropractic Insurance Group Long Term Care Insurance Flexible Spending Accounts/Health Savings Accounts Employee Assistance Programs Wellness Programs •
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www.CalNonprofitsInsurance.org • 888.427.5222
Employer Health Insurance Under ACA Is Employer Health Insurance Mandatory? Less than 50 employees – NO Requirement 50 or more employees – Play or PAY (penalties for employers with 50 – 99 employees began in 2016) •
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Employer Mandate Penalty
If you have 50+ employees, unless you offer qualifying/affordable coverage to ALL full-time employees (working 30 or more hours) and their children, if even one employee goes to the Exchange and receives a subsidy for coverage you will face a penalty. Which penalty you’ll pay is subject to a number of factors including whether you offer coverage at all, what % of your full-time employees and their dependents you offer it to, whether it’s qualifying coverage, and whether it’s affordable. $2000 per every full-time employee (2015: minus first 80 employees) (2016: minus first 30 employees) $3000 for each full-time employee getting a subsidy OR PENALTY 1 PENALTY 2 •
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www.CalNonprofitsInsurance.org • 888.427.5222
Employer vs. Individual Plans Benefits of offering employer-sponsored health insurance include: Recruiting and retention tool Employer plans still have better coverage for less cost Tax-free benefits for employees Employers who reimburse employees for individual health plans face a $100 a day or $36,500 per year, per employee tax. This rule applies to all employers, but the fine itself is only levied on organizations with 50 or more full-time equivalent employees. NOTE •
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www.CalNonprofitsInsurance.org • 888.427.5222
Employer-Sponsored Plans Employer Compliance Requirements You must follow ERISA, state and ACA laws or face penalties Provide documentation to all plan enrollees and new hires: → Summary of Benefits & Coverage (SBC) - provided by health plan carriers → Summary Plan Description (SPD) document that describes rights and benefits under your benefit plans. Employers are responsible for creation. → Provide Notice of Exchange and mandatory ERISA notices (women’s health rights, right to designate providers, etc.) New employee waiting period restrictions → May not exceed a maximum of 90 days Medicare Part D Notices → Notifies Medicare-eligible participants whether your group plan meets prescription drug coverage minimums •
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www.CalNonprofitsInsurance.org • 888.427.5222
Buying Tips Work with a trusted and knowledgeable insurance agent Compare plans from different carriers Don’t be afraid to ask questions Know your budget Is Covered California a good option for your organization? What is important in a plan offering to you? •
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www.CalNonprofitsInsurance.org • 888.427.5222
Resources Nonprofit Risk Management Center Glossary - CalNonprofits Insurance Services website Webinars Client portal Carrier Website – often overlooked source of excellent loss control and risk management advice •
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www.CalNonprofitsInsurance.org • 888.427.5222
How to Shop For Insurance And Get the Best Deal Find an insurance broker that knows nonprofits Choose a broker before going to market Ask your broker to shop carriers – a good nonprofit broker will have access to all nonprofit markets Not all insurance policies are created equal: review your policy with your broker Consider higher deductibles to save money Determine your “essential” and “optional” insurance coverages: Workers’ Compensation General Liability or Package Director’s & Officers Don’t underestimate the importance of good risk management •
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Questions? Colleen Lazanich, CIC CRM
(831) Debra Chargois-Butler (888) X1002 Check out our on-demand webinars at for more information and tools to introduce a loss control program in your organization.
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