Every organization, regardless of type or size, is feeling the strain of COVID-19. For nonprofit and human service organizations, that strain may be particularly acute. Community needs for services are continuing to grow at a time when costs are increasing and fundraising and other funding sources have become more difficult to obtain.
As your organization works to resume or refine its operations in this COVID-19 environment, evaluate your preparedness for the following types of risks and liabilities.
1. BUSINESS INTERRUPTION
Due to ‘stay at home’ mandates, many nonprofits closed completely or reduced operations significantly. Extra expenses associated with the shutdowns make a costly situation worse. While many commercial insurance policies include business interruption coverage designed to make up for lost income and extra expenses, such provisions typically exclude losses related to viruses and bacteria.
2. PROPERTY, AUTO LIBAILITY
Your organization may have fewer insured vehicles on the road and may be using your facilities less (or not at all). However, it is important to have property and liability coverage in place, including premises liability protection. If your office space is not being used on a regular basis, your risk of losses due to vandalism or theft is higher than it would otherwise be. You also run the risk that the premises may not be maintained appropriately, increasing the likelihood that someone could be injured on-site.
3. WORKERS’ COMPENSATION
Several states have either enacted, or are considering enacting, “presumptive liability” which enables an essential employee who contracts COVID-19 to file a workers’ compensation claim. . In Pennsylvania, for example, essential workers who are diagnosed with COVID-19 are presumed to have contracted the virus in the workplace, meaning employers’ insurance carriers are responsible for paying workers’ compensation benefits including medical care, lost wages, and more.
4. EVENT CANCELLATION
Due to travel restrictions and limitations on large gatherings, many nonprofits have found themselves in the unfortunate position of needing to cancel fundraisers and other events. Organizations that choose to go ahead with in-person events could face significant liability and reputational harm if a subsequent COVID-19 outbreak occurs and is tied to the event. In most cases, event cancellation insurance does not cover communicable diseases. However, as with business income losses and extra expenses, nonprofits are still urged to file claims with their insurance companies to document their losses and protect their potential future rights to recover policy benefits.
5. LIABILITY – BODILY INJURY
Unfortunately, nonprofits and human service organizations are not immune from claims that someone who visited your offices or interacted with an employee contracted COVID-19 from that encounter. Someone who tests positive for the virus and believes they can trace exposure to your organization may try to claim that you failed to exercise reasonable care. Nonprofits can limit their liability risk by implementing safeguards, creating policies and procedures, and training employees. Documenting actions taken can also be a valuable tool in the event you need to defend against this type of liability suit.
6. CYBER LIABILITY
With many nonprofit employees working remotely, the risk of cyberattacks has grown exponentially. Whether an attack involves a virus, malware, ransomware, or phishing, the outcome can be prohibitively expensive as organizations grapple with IT-related expenses, public relations, and other costs. Cyber insurance helps mitigate the costs related to cyber attacks and significantly reduces your exposure in this area of growing concern. In addition, organizations can (and should) implement internal policies and procedures to lower their risk of falling victim to cyber criminals.
Is Your Current Insurance Protection Adequate?
Having the right insurance protection with coverage levels designed to meet your organization’s needs can be instrumental in helping you mitigate risk. Every organization faces liability risk, of course. However, when you are prepared to meet those risks head on, you can continue furthering your organization’s mission with confidence during this trying time.
Contact Lamb Insurance Services today to learn more about how we work with nonprofit and human service organizations, helping them mitigate their risks related to property and liability, employee benefits, workers’ compensation, and more.