The non-profit sector in the US has faced a barrage of insurance-related issues over recent months that have culminated in what some are calling an “insurance crisis,” including a hardening property and casualty insurance market, lessened appetite among insurers that traditionally supported the space, and last but certainly not least, the COVID-19 pandemic, during which time many non-profits have been providing frontline services to the public.
“It’s been feast or famine,” said Paul Doman, Nationwide’s specialty care loss control director. “We’ve had customers that have been completely shut down and we have other customers that have ramped up their business. An example might be a YMCA – they’re shut down, but the Food Bank has ramped up their business significantly so that they’re adding space with new buildings and people.”
Nonetheless, even for those that have seen more activity during this time, there have been added stresses. For one, the lack of daycare options has put a burden on some volunteers’ shoulders. With staff not being able to get childcare, many were not able to come in to do their work, especially concerning at organizations that work with vulnerable populations, such as the Ronald McDonald Houses or group homes. In response, the Nationwide team provided materials to help these organizations set up pop-up or temporary daycare centers.
Alongside these adjustments, non-profit organizations have needed to take further steps to adapt their operations to the new coronavirus-ridden world.
“The pandemic has forced non-profit organizations to make adjustments necessary to continue their mission-critical activities,” explained William Henry, consultant at Volunteers Insurance Service Association (VIS) in Alexandria, Virginia. “In some cases, it’s a matter of adjusting operations to take best advantage of paid staff and volunteer resources. In some cases, they have had to suspend activities entirely. But there are many examples of organizations redirecting some of their ‘normal’ volunteer activity into new channels.”
In one instance, the Jewish Federation of Greater Pittsburgh developed a list of virtual/at-home and non-local opportunities for interested volunteers. VIS created guides for organizations wanting to follow in similar footsteps, titled “How to Make Remote Work Work,” as well as a guide on returning to the workspace titled “Back to Work: Creating a Safe Environment for Employees.”
As expected, insurance coverage questions have also arisen during this time, especially considering the struggles that some non-profits have faced in securing affordable and appropriate coverage before the pandemic even hit. Doman said that a common question from non-profits has concerned temporary employees, which some brought on in bigger numbers because they needed more staff. Sometimes, one type of facility loaned employees who are idle to another type of facility, introducing potentially new exposures.
In the meantime, to help mitigate against risks related to the pandemic and particularly around the threat of the virus spreading in a workplace, “We’ve been advising our customers to, at a minimum, follow the CDC guidelines for protective equipment, and OSHA also has guidelines from a workers’ comp standpoint for how to protect employees,” explained Doman. “We would see that as the starting point for protecting employees because most of these non-profits will have services where they’re meeting one-on-one with clients.”
The business interruption coverage debate has likewise reached the non-profit world, though like in other sectors, it has so far brought little success for insureds.
“As enormous as the COVID-19 disruption has been, most business interruption and extra expense policies exclude losses caused by pandemics,” said Henry. “There are exceptions, but that’s the rule.”
He pointed to legislation in some states that would force insurers to pay claims despite the exclusions, and the ongoing discussions around implementing a federal backstop program for COVID-19 losses, which would also impact the non-profit sector.
However, the status of these developments is ‘To Be Determined.’
“We’ll see how that plays out,” noted Henry.