By Dawn M. Fernandez, CAS, CLP
Protecting Your Organization and Its Assets
One of the most crucial steps in safeguarding a non-profit organization is ensuring that all businesses, vendors, and 1099 contractors you work with have adequate insurance coverage. This protects your organization from potential financial losses and legal liabilities that may arise from accidents, injuries, or property damage.
Understanding Certificates of Insurance
A Certificate of Insurance (COI) is a formal document that verifies a company’s insurance coverage. It typically outlines the types of insurance they carry, the limits of coverage, and the policy effective dates. By requiring and retaining, COIs from your partners, you can ensure that they have the necessary insurance to protect your organization in case of an incident.
Key Reasons to Require COIs
- Financial Protection: If a vendor or contractor causes property damage or bodily injury, their insurance can cover the costs associated with repairs, medical expenses, and legal fees.
- Legal Liability: A COI can help protect your organization from lawsuits and legal disputes that may arise from accidents or incidents involving your partners.
- Risk Mitigation: By verifying insurance coverage, you can identify and mitigate potential risks associated with working with certain vendors or contractors.
- Compliance: Many contracts and grant agreements require non-profit organizations to obtain COIs from their partners.
What to Look for in a COI
When reviewing a COI, ensure that the following information is included:
- Named Insured: The company or individual responsible for the insurance.
- Policy Number: The unique identifier for the insurance policy.
- Insurance Carrier: The name of the insurance company providing coverage.
- Types of Coverage: The specific types of insurance, such as general liability, commercial auto, and workers’ compensation.
- Limits of Liability: The maximum amount the insurance company will pay for a covered claim.
- Effective Dates: The start and end dates of the insurance policy.
Additional Considerations
- Waiver of Subrogation: This clause prevents the insurance company from seeking reimbursement from your organization in the event of a claim.
- Loss Payable Clause: This clause ensures that your organization is listed as a payee on the insurance policy.
- Certificate Holders: Ensure that your organization is listed as a certificate holder.
By requiring certificates of insurance from your business partners, you can significantly reduce your organization’s risk and protect your valuable assets. It’s a simple but essential step in safeguarding your non-profit’s financial health and reputation.
Dawn Fernandez has a strong foundation in technology and education, and has dedicated her career to empowering individuals and organizations. Her expertise in adult training, coupled with her understanding of legal structures, has equipped her to provide tailored solutions and exceptional support to non-profit agencies. As a Senior Account Manager specializing in insurance coverages for these organizations, she is committed to helping them navigate the complexities of the insurance landscape.
In addition to her professional role, she is passionate about sharing knowledge and insights through content creation. Her blog provides valuable information on insurance topics, empowering individuals and businesses to make informed decisions.