Liability Insurance for Non-Profits
Liability insurance is a part of the general insurance system of risk financing to protect the non-profit (the "insured") from the risks of liabilities imposed by lawsuits and similar claims.
Liability insurance is designed to offer your non-profit organization specific protection against third party insurance claims, i.e., payment is not typically made to the insured non-profit, but rather to someone suffering loss who is not a party to the insurance contract.
In general, damage caused intentionally as well as contractual liability are not covered under a non-profit's liability insurance policies. When a claim is made, the insurance carrier has the duty (and right) to defend the insured organization. The legal costs of a defense normally do not affect policy limits unless the policy expressly states otherwise; this default rule is useful because defense costs tend to soar when cases go to trial.
What Non-Profit Organizations need Liability Insurance?
Every organization that can be held as negligent in a lawsuit.
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