Business owner’s policy for nonprofits

A business owner's policy (BOP) is often a smart choice for nonprofits that have both a physical location or business property and exposure to third-party liability risks. For example, a nonprofit may own medical equipment in an animal shelter or a building purchased by a church.

Combining the coverage of both general liability and commercial property insurance, a BOP can pay for third-party bodily injuries and property damage, as well as damage to your nonprofit's covered property.

This policy safeguards against:

• Damage to nonprofit-owned buildings, equipment, furniture, and supplies
• Visitor injuries and customer damage claims
• Advertising injuries, such as copyright infringement or libel claims
• Lost income and ongoing expenses if a covered event forces your nonprofit to temporarily close

The owners of nonprofit organizations can tailor a BOP to meet their specific needs. Useful add-ons often include business interruption insurance (also called business income coverage) to protect against temporary closure, among other endorsements.

Nonprofits that are eligible for a BOP typically:

• Have fewer than 100 employees
• Have a small office or workplace
• Make less than $1 million in annual revenue (i.e. grants, donations, and program fees)
• Operate in a low-risk industry
• Need less than 12 months of business interruption insurance

Talk to a licensed Insureon agent who specializes in nonprofit insurance to find out if your organization meets the criteria for a BOP.

A BOP provides broad protection for many of the risks nonprofits face during their day-to-day operations, including:

The commercial property insurance included in a BOP protects:

• Business equipment, such as computers
• Office furniture and furnishings
• Inventory, such as a food bank’s stock
• Valuables, such as a museum’s collection
• Your building if you own it

If your nonprofit is damaged by a fire—even one that started in an adjacent building—this policy can help pay for renovations and repairs. It also covers the cost of vandalized, stolen, or broken items.

The general liability portion of a business owner’s policy can pay for legal bills and reparations related to third-party injuries or property damage. For example, it can offer coverage if:

• A potential adopter is bitten by a dog at your animal shelter
• An employee at your charitable organization drops a visitor’s smartphone
• A delivery person slips on the icy front step of your church
• A vendor is injured setting up for your nonprofit's annual fundraising gala

General liability coverage also helps protect against advertising injuries, including:

• Defamation, such as libel (written) and slander (spoken)
• Copyright or brand infringement

For example, if an employee writes a negative comment about a competitor on social media and your nonprofit is sued for libel, general liability insurance could help pay for the cost of your legal defense.

If your nonprofit is forced to temporarily close due to water damage from a burst pipe or other disruption, you could lose out on profits—yet still be responsible for operating costs.

For example, a community center might lose out on program fees while closed for renovation due to a flood, but still have to pay rent.

Included in most BOPs, business interruption insurance can cover normal operating costs, payroll, and other expenses related to forced closure.

A business owner’s policy provides protection against many common risks for nonprofit organizations, but it doesn’t offer coverage for every situation. Nonprofits should also consider the following as part of their risk management strategy: 

Professional liability insurance: Also known as errors and omissions insurance or E&O, this policy can help cover legal expenses if your nonprofit is sued for unsatisfactory work or negligence.

Directors and officers (D&O) insurance: D&O protects board members and officers against legal expenses if they're sued for a decision they made on behalf of a nonprofit that led to financial loss.

Workers’ compensation insurance: Required in nearly every state for nonprofits that have employees, workers’ comp can cover medical expenses for work-related injuries and illnesses.

Employment practices liability insurance (EPLI): If a nonprofit is sued by an employee over harassment, discrimination, or another violation of employee rights, EPLI can pay for legal costs.

Protect your nonprofit from third-party claims and business property damage costs with the right business owner's policy. Insureon makes it easy to compare quotes from top-rated insurance companies, customize your coverage, and purchase a policy online in just a few minutes.

Complete Insureon’s easy online application today to review options tailored to your organization. Once you find the right policy, you can begin coverage and receive a certificate of insurance (COI), often within 24 hours.