How much does insurance cost for nonprofit organizations?

Nonprofit organizations pay an average of $42 per month, or $500 per year, for general liability insurance.

General liability insurance helps cover legal fees related to common third-party lawsuits from clients and visitors, including those related to bodily injuries, property damage, and advertising injuries. For example, a visitor could slip on a wet floor in your office, then sue your business to recoup the cost of medical treatment for their injury.

This is the average general liability policy for nonprofits that buy from Insureon:

Insurance premium: $42 per month
Policy limits: $1 million per occurrence; $2 million aggregate

The cost of general liability insurance depends on several factors, such as the coverage limits you choose, the size of your organization, the amount of foot traffic you have, your location, and any endorsements on your policy, such as an additional insured or special event insurance.

General liability insurance costs increase with the likelihood of third-party lawsuits, such as someone suing your nonprofit over a slip-and-fall injury. That's why nonprofits that are open to the public can expect to pay more for this coverage than those with limited access.

This leads to a wide range of insurance premiums for different professions. Among nonprofit organizations that purchase general liability insurance with Insureon, 69% pay less than $60 per month and 17% pay $30 or less per month.

Professions that involve riskier and more frequent interactions with visitors or their property typically pay more for general liability insurance.

For example, animal shelters pay a high rate of $61 per month, on average, as there is a higher chance of injury with a poor encounter with an unruly dog, cat, or other animal. Vocational workshops and counseling and referral centers that do less risky work have a lower average rate of $32 per month.

As you can see, the cost varies for different types of nonprofit services:

Policy limits are the maximum amounts your insurance company will pay for covered claims.

The per-occurrence limit is the most your insurer will pay for claims resulting from a single incident, while the aggregate limit is the most your insurer will pay for any claims during your policy period, typically one year.

Most nonprofit organizations (93%) choose a general liability policy with a $1 million per-occurrence limit and a $2 million aggregate limit. As your nonprofit grows, you may need to raise your policy limits.

Choosing lower limits is one way your nonprofit can save money on general liability insurance, though you'll still want enough coverage to handle a lawsuit.

Nonprofits pay an average of $82 per month, or $981 per year, for a business owner’s policy.

A business owner's policy, or BOP, bundles general liability coverage with commercial property insurance to cover both third-party risks and your business property. It typically costs less than purchasing each policy separately.

A BOP protects against client injuries and property damage. It also covers damage to your building, equipment, and inventory. Because of its increased coverage and affordability, it’s the policy most often recommended by Insureon’s agents.

This is the average BOP for nonprofit organizations that buy from Insureon:

Premium: $82 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $1,000

Adding endorsements to your BOP raises the premium, but it can be worth it for the extra coverage. For example, you can include business interruption insurance to protect against financial losses if a fire or storm forces your nonprofit to close temporarily.

Small, low-risk organizations are typically eligible for a business owner's policy. Additionally, nonprofits can often bundle this policy with professional liability insurance at a discount.

The cost of a business owner's policy is based on a number of factors, including the value of your property, where you are located, the number of employees and staff you have, and your profession.

Among nonprofits that purchase a business owner’s policy with Insureon, 27% pay less than $50 per month and 61% pay less than $100 per month.

Organizations with large or more expensive business property will typically pay more for a BOP than nonprofits with smaller premises or lower value business property. Your industry risk, years in operation, and claims history will also affect your premium.

For 501(c)(3) organizations, workers’ compensation insurance costs an average of $62 per month, or an annual premium of $739.

This insurance policy covers medical expenses when an employee is injured on the job, and it also provides disability benefits while they're recovering and unable to work.

To comply with your state’s requirements and avoid penalties, nonprofits with employees typically must purchase this coverage. It's also recommended for sole proprietors, as health insurance plans can deny claims for medical bills when an injury or illness is related to your job.

Most policies include employer's liability insurance, which covers the cost of lawsuits related to workplace injuries. There's usually no limit to how much a workers' comp policy can pay for employee benefits, though it depends on state laws.

The cost of workers' compensation insurance depends on several factors, including the number of employees you have and the level of risk involved with their jobs.

Get more information on how to find affordable workers' compensation coverage.

Among nonprofit organizations that buy workers’ compensation insurance with Insureon, 34% pay less than $50 per month and 62% pay $100 or less per month.

Workers' comp costs depend on the number of employees and staff you have at your organization. A larger workforce brings a higher risk of worker injuries, which is why bigger nonprofits tend to pay more for this type of insurance.

Nonprofits pay an average premium of $56 per month, or $674 per year, for professional liability insurance. You might also see this coverage called errors and omissions insurance (E&O).

This policy offers critical coverage for any nonprofit organization, such as community centers. It helps pay for legal costs if you're accused of professional negligence, such as a mistake, oversight, or failure to meet a standard of care.

For example, if you fail to perform professional duties or make mistakes while providing services, this policy would cover the costs of the resulting lawsuit.

This is the average professional liability policy for 501(c)(3) organizations that buy from Insureon:

Premium: $56 per month
Policy limits: $1 million per occurrence; $1 million aggregate
Deductible: $1,000

Nonprofits can often combine this coverage in a business owner’s policy or general liability policy for savings. Many factors can affect the cost of professional liability insurance, such as your line of work, your claims history, and the policy limits you choose.

It's possible to reduce your costs by selecting lower limits or a higher deductible. You can also manage your risks to avoid lawsuits and subsequent claims that would otherwise raise your premium.

For nonprofit organizations, the monthly average premium for directors and officers (D&O) insurance is $67 per month, or $801 annually.

This policy can protect your nonprofit’s directors and officers from legal costs related to mismanagement of funds, failure to comply with regulations, or failure to perform official duties.

For example, this coverage would cover defense costs if a volunteer who donated generously at a fundraiser finds out that their money was lost in an unwise investment, and decides to sue the board member who was responsible.

It's common for some directors to request a D&O insurance policy before they agree to come on board with your nonprofit. For this reason, having this coverage is key as it helps attract top talent. Even if your board of directors doesn't request D&O coverage, it's strongly recommended for every nonprofit to obtain it as part of its risk management plan.

The cost of directors and officers insurance is mostly determined by the impact your board's decisions could have on another party's finances. Additional factors that impact your premium include the number of officers and directors you have, your claims history, and the policy limits and deductible you choose.

You can often bundle your directors and officers coverage with other management liability insurance policies, such as employment practices liability insurance (EPLI).

Nonprofits pay an average of $126 per month, or $1,508 per year, on a bundle package of employment practices liability insurance and D&O insurance.

EPLI coverage protects your nonprofit from legal fees if an employee sues over wrongful termination, harassment, or another violation of their employee rights.

When underwriting your EPLI premium, insurance companies will consider a number of factors including the number of employees and staff members you have, your hiring practices, your employee turnover rate, and past EPLI claims history.

Nonprofit organizations pay an average of $151 per month, or $1,808 annually, for commercial auto insurance.

Most states require this coverage for vehicles that are owned by a nonprofit, such as vans owned by an animal shelter. For personal, rented, and leased vehicles used by your business, look to hired and non-owned auto insurance (HNOA) instead.

A commercial auto policy provides financial protection in the event of an accident involving your nonprofit-owned vehicle. It can help pay for property damage, medical costs, and legal expenses.

The cost of commercial auto insurance depends on several factors, including your policy limits, the value of the vehicles, and the driving records of anyone permitted to drive. The types of auto insurance you choose, such as comprehensive coverage, will also affect your premium.

Learn more about how to find affordable commercial auto insurance coverage.

501(c)(3) organizations pay an average of $130 per month, or $1,557 annually, for cyber insurance. This policy is also called cyber liability insurance or cybersecurity insurance.

Cyber insurance helps nonprofits recover financially after a data breach or cyberattack. It can help pay for notification costs, fraud monitoring services, and other expenses necessitated by state data breach laws.

The cost of cyber insurance depends on the amount of personal information handled by your nonprofit organization, such as donors' credit card numbers and email addresses, along with the number of staff who can access that information.