Insurance is one way for not-for-profits to manage risks, by shifting or transferring risks to an insurer in exchange for a premium. Improve insurance and claims management activities through the following:
- Review insurance arrangements annually and before renewals
- Seek the assistance of your broker (not an insurance agent, there is a difference)
- Assess whether you need to make annual disclosures to an insurer and do so in writing
- Determine whether funder, statute or other contractual obligations impose specific insurance requirements
- Renew policies on time to avoid coverage gaps
- Evaluate the need for one-off or special coverage that may require a rider or an endorsement, for example, for overseas travel by employees or volunteers or for fundraising events
- Comply with statutory requirements and best practices for insurance for volunteers, directors and officers
- Keep a permanent historical record of policies, with backups, especially for occurrence based policies
The above are snippets from guidance in SPP NP 1.14 – Insurance (coming soon) in First Reference’s Not-for-Profit database in PolicyPro. Read the policy to learn more about transferring risks.
Meeting your duty of care
Insurance coverage can be an effective way for not-for-profits to transfer risk if policies are cost-effective, comply with statutory requirements and provide the coverage expected. Implement procedures to ensure that insurance is an effective risk management response.
Log in to the Not-for-Profit database in PolicyPro and see SPP NP 1.14 – Insurance (coming soon) for detailed guidance.
Policies and procedures are essential, but the work required to create and maintain them can seem daunting. The Finance and Accounting, Operations and Marketing, Not-for-Profit and Information Technology databases in PolicyPro, co-marketed by First Reference and Chartered Professional Accountants Canada (CPA Canada), contain sample policies, procedures, checklists and other tools, plus authoritative commentary to save you time and effort in establishing and updating your internal controls and policies. Not a subscriber? Request free 30-day trials of Finance and Accounting, Not-for-Profit, Operations and Marketing, and Information Technology databases in PolicyPro here.
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