As a board member, it is your responsibility to understand your group's insurance needs and help make sure you have the right coverage. Here are guidelines for board members who want to make sure their community nonprofit has appropriate insurance coverage:
1. Monitor suits, threats of suits, and accidents. The board (or a risk management committee of the board) should be informed of any insurance claims made against the nonprofit and when threats of suits arise. In some organizations it's appropriate for the board to set goals and monitor progress on safety and risk reduction, such as reports on the number and type of automobile accidents and whether there were injuries, and what might have been done to prevent the accident.
2. Periodically review risks, risk reduction practices, and coverages. Depending on the size of the organization, the board, a board committee, a board-staff task force, or other group should develop a list of the key risks faced by the nonprofit and have a process to periodically review incidents or claims. Obvious areas of concern are driver selection and training, policies to protect vulnerable clients, and potential for fraud and damage to property. Less obvious risks are potential damage to reputation and staff morale from poor management.Your insurance broker should be able to assist with identifying the most important risks to address.
3. Review and consider changing brokers. Every few years, the board should review itsrelationship with its broker, just as it reviews the relationship with the auditor. In this review board representatives should look over what coverages are being purchased, at what rates, from which insurance companies, and whether the nonprofit is getting the services (such as prompt payments) it deserves. We at NIAC and ANI-RRG are proud of the other services we provide free or at low cost to the nonprofits that insure through us: services such as driver training and monitoring (for organizations with vehicles), informational booklets (such as the issue of serving alcohol at special events), webinars on risk reduction, and others. Be sure that you are getting the most value out of your relationship with your broker, and with your insurance companies.