ISSUE DESCRIPTION:

The voluntary sector is made up of nonprofits and charities of all sizes working in a broad range of areas, from environmental issues to social service programs. Due to the nature of the sector, the insurance needs of organizations vary widely. However, third party, or general liability insurance; directors' and officers' coverage; and errors and omissions coverage are common types of insurance that are required.

In recent years, research by the Voluntary Sector Initiative (2002) and others has underlined that voluntary sector organizations face a number of insurance-related challenges that affect their ability to operate. Particularly affected are organizations dealing with vulnerable populations, including children, seniors and the disabled. The key issues that have been identified include:

Affordability - Liability insurance needs to be priced within an organization's means. Rising premiums pulls precious funds away from an organization’s activities and programs.

Accessibility - The appropriate liability insurance coverage is offered and comes to the attention of organizations. Organizations that cannot obtain the coverage they need, for example due to work with a high-risk population such as children, are forced to abandon programs, even if they are a critical resource for the community.

Stability – Connection to global insurance trends and other factors in the external environment leads to premium costs that fluctuate and when premiums rise suddenly, organizations can’t predict or plan for insurance costs in their annual budgeting processes. It is difficult for organizations to find the necessary funding to cover unexpected premium costs.

This section of CCVO’s website provides information and resources about the insurance-related issues in the voluntary sector

For a detailed backgrounder about insurance issues in the voluntary sector, please visit the Voluntary Sector Forum’s website.