Professional liability insurance, also called errors and omissions insurance, protects small businesses against the costs of client lawsuits over unsatisfactory work.
A work mistake or alleged negligence at your charitable organization, animal shelter, or other nonprofit could lead to major lawsuits and losses, resulting in a tremendous financial burden for your small business. In the event that a community member or client sues your organization, professional liability insurance can cover attorney’s fees, court costs, and even settlements or judgments.
This policy provides liability coverage related to:
Being accused of a professional mistake can be costly, especially for a small business. If your animal shelter skips a background check and an adopted pet is abused, you could face an expensive lawsuit. Professional liability insurance for nonprofit organizations can help cover attorney’s fees, court costs, and other legal expenses.
As a nonprofit professional, you try to offer solutions to important social problems. However, your efforts might not always go as planned. When your nonprofit is accused of not fulfilling its promises, professional liability insurance can cover the cost of a lawsuit, including a settlement or court-ordered judgment.
Nonprofits that provide counseling or guidance can be exposed to massive liability. For example, if a staff member at your counseling center fails to recognize suicidal ideation in a teen, your organization could be accused of negligence if the teen later causes self-harm. In the event of a lawsuit, professional liability insurance can cover the expense of hiring an attorney, court costs, and settlements or judgments.
While professional liability insurance guards against work mistakes and negligence, it does not offer complete protection. No matter what type of nonprofit you run, injuries and property damage are a possibility. Other policies to consider include:
Business owner's policy: A BOP bundles general liability insurance with commercial property insurance, often at a lower rate than if the policies were purchased separately.
Directors and officers insurance: D&O insurance for nonprofit organizations protects board members and officers against legal expenses if they are sued for a poor decision, such as an extravagant purchase that wasted donated funds.
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: If a nonprofit is sued by an employee over harassment, discrimination, or another violation of employee rights, EPLI can pay for legal costs.