NAO is not authorized to give legal advice. If you wish to be certain about the proper course of action, please consult a licensed attorney.
- What basic insurance should my organization have?
- How do I protect my Board?
- How do I find insurance coverage?
- What are the Americans with Disabilities Act (ADA) requirements I may have to follow?
- Where do I find laws and regulations about employment practices?
- What about Workers’ Compensation Insurance and Unemployment Insurance Taxes?
The most basic coverage should include:
- General liability insurance
- Bonding insurance
- Auto insurance if cars are used in the work of the organization
Other types of insurance to consider are:
- Directors and Officers (D&O) Insurance
- Errors and Omissions Insurance
- Volunteer Insurance
- Property Insurance that will also cover agency records
For more information about risk management and insurance check out:
- The Alliance for Nonprofit Management
- Nonprofit Risk Management Center
- Alliance of Nonprofits for Insurance
Visit the Nonprofit Risk Management Center to purchase Coverage, Claims, and Consequences: An Insurance Handbook for Nonprofits.
One of the main reasons organizations incorporate is to protect the directors and officers who run the organization from being personally liable for actions that they perform on behalf of the organization. Assuming the organization is incorporated, most lawsuits against the nonprofit could only reach the corporation's assets. However, a director or officer does face the risk of personal liability if, among other things, s/he fails to act with due care in governing the corporation or in otherwise acting for the corporation.
A Directors and Officers (D&O) insurance policy protects the organization, its directors, officers, employees and volunteers for their "wrongful acts" in governing and managing the organization. It's certainly not required to get D&O insurance, so it will depend somewhat on what you think is the potential risk that these individuals would commit wrongful acts.
The cost of D&O insurance is sometimes prohibitive, and even if you are able to carry such coverage, there are other steps you should consider:
- If you have employees, establish good personnel policies and ensure they are followed
- Designate a staff/board person who is or will become knowledgeable about employment law
- Consider obtaining an insurance policy to cover your volunteer
- Have clear policies that explain expectations of volunteer and staff conduct
- If you conduct fundraising events, be sure the venue is insured, either by the owner or your organization. Be aware of additional liability issues related to serving alcohol.
- If your organization is liable for employment taxes, have adequate fiscal controls to ensure the Board knows the taxes are being paid
For more information about D&O insurance coverage, you might want to read this interesting article.
Difficulty finding insurance products for your nonprofit is becoming more common as the insurance industry is going through a period of financial stress. Fortunately, the Alliance of Nonprofits for Insurance (ANI-RRG), a nonprofit insurance company based in California, was created to provide stability in the insurance market for nonprofits in Oregon and Washington.
For more information and to obtain the names of brokers in Oregon who can help you access their services, visit ANI-RRG.
If you are a small nonprofit, your ADA requirements may be found here.
For more more information about ADA requirements, click here.
In Oregon, the Bureau of Labor and Industries, or BOLI, administers the labor laws. If you are an employer and need answers about salary, payroll deductions, compliance with the law, vacation and sick time, and any other labor and employment issue please contact BOLI at 971-673-0824 or email@example.com.
Visit BOLI's Frequently Asked Questions here.
You can also download The Employer's Guide for Doing Business in Oregon.
If you employ just one person for any length of time, chances are you will need to obtain a workers’ compensation insurance policy or face stiff penalties for noncompliance with state laws.
If you have any questions about Workers’ Compensation in Oregon, please contact the Workers’ Compensation Division at 800-452-0288 or firstname.lastname@example.org. For more information, you may also visit the WCD’s website.
Workers’ Compensation coverage in Oregon is open and competitive, meaning you don’t have to obtain it from the state. You can talk to your own insurance broker or agent about getting a policy, or you may call SAIF (a quasi public agency) at 800-285-8525.
Unemployment Insurance Taxes
All employers in Oregon must pay unemployment insurance taxes. Oregon nonprofits exempt under § 501(c)(3) of the Federal Tax Code may choose to obtain coverage directly from the state, or to reimburse the state if/when an employee files a claim.
You can also find the Employment Department’s Employer Handbook here.