News & Insights


Growing Trends in the Non-Profit World

A Sovereign Insurance sales executive recently attended a nonprofit insurance conference sponsored by one of our preferred carriers that offers professional and management liability for many of our non-profit customers. Some general trends regarding non-profit organizations that were shared include:

  • Experiencing consistent growth year after year
  • Continued expansion with new non profits forming every year
  • Charitable donations are on the rise
  • Increased number of contracts are requiring proof of insurance with Additional Insured status
As the economy has suffered over the past 6 years, nonprofit organizations have stepped in to fill the gaps in a number of social service/community areas of need as allocated government funds have dried up or, at the very least, allocations restricted. There are now over 2,300,000 not for profit entities in the U.S. with an annual growth rate of 5% with social services and religious organizations making up over 30% of those. Specifically within the social service class, 7% of the workforce is represented with expected job growth to increase over 35% in the next decade.

This significant growth in nonprofit social service, churches and faith-based organizations leads to a greater exposure to potential claims and the need to be aware of insurance implications. Add in the increasing avenues for giving charitable donations, including via texting and on-line social media platforms, the potential of a claim against managers, directors and officers increases.

Social Service claims examples:
  • Youth mentoring organization sued when an adult employee had a relationship with a minor client
  • Organization sued when one child abused another child within their care
  • After-school organization sued when a child was taken to a petting zoo and mauled by an animal at the zoo
  • Social service organization sued by a parent for reporting possible child abuse by that parent
  • Youth sports association sued for not recognizing concussion symptoms and allowing a player to reenter a game, resulting in a severe traumatic brain injury
  • Claim against current and former directors of an nonprofit board brought by an estate alleging mismanagement of designated monetary gifts
There has never been a more important time than now to review your organization’s insurance program to ensure that you have the necessary coverage to guard against such claims so that the organization can continue to carry out its social mission.