Non-profits can no longer invoke the doctrine of charitable immunity – the notion that organisations and individuals should be exempt from legal liability while contributing selflessly to the improvement of their communities – because very few entities respect and recognise it nowadays. The doctrine was originally based on an 1861 English court case, but has over time become archaic.
Moreover, there is very limited state law protection for non-profits – only Alabama, Delaware, and Colorado provide a legal shield for volunteers working for charitable organisations.
Thus, producers need to help non-profits to adopt a basic risk management strategy. Risk management professionals are in a good position to help non-profits reduce exposure to potential lawsuits, and insure against risks inherent to their missions, goals and objectives.
Producers can also help organisations consider their unique needs and financial constraints when shopping around for insurance. A general liability policy is often inadequate in covering all the risks involved in operating a non-profit, and often bespoke D&O policies will need to be added.
