A successful non-profit involves many responsibilities, and being prepared for a crisis is one of the most important. A solid crisis management plan, developed with the guidance of an experienced insurance agency, helps organizations respond quickly, protect their teams, and reduce unnecessary costs.
A well-structured plan helps manage unexpected challenges and make insurance coverage more effective, potentially lowering premiums and providing greater organizational stability. This guide outlines the steps non-profit directors can take to create a practical, effective crisis management plan personalized to the needs of their organization.
The Current State of Crisis Management
Studies show that fewer than half (49%) of U.S. businesses have a formal crisis communication plan, and less than 1 in 4 (23%) have an informal one. Yet, businesses continue to see price increases on most types of insurance.
This means that as organizations develop a crisis management plan, priorities shift to securing lower premiums and maximizing the value of insurance.
Key Takeaway: The goal is to make sure these higher costs are used strategically and not lost due to a lack of preparedness.
How Crisis Management Plans Save Non-profits Money
Well-made crisis management plans can lower insurance costs and make it easier for non-profits to recover from disasters. The benefits listed below can help non-profits set priorities when discussing their insurance goals, as well as measure the effectiveness of their plans:
Defining the Scope of a Crisis
Non-profits rely on their donors, communities, and volunteers to maintain their mission and operations. After a crisis, a good management plan can help the business’s leaders determine the scope of the damage and respond effectively and timely. This allows non-profits to put the crisis behind them and continue supporting their mission, even if some resources need to be used to resolve the issues.
Example: A data breach, including a hack or a leak, can damage non-profits in more ways than one. Private donor information, financial details, and operations data can be exposed. However, associated negative media attention after a hack can disrupt the business too. Good crisis management plans consider every angle, including financial, marketing, management, and more.
Addressing Financial Issues
Well-planned crisis management strategies tell board members and other key personnel what must be done during and after a crisis to keep operations running smoothly. This includes managing the finances of the business, compliance issues, and addressing security issues as soon as possible.
Example: Consider the crisis of an executive director guilty of financial mismanagement. With the right plan, their actions can be identified and handled by proactive board members before the media exposes them.
Preparing the Recovery Plan
While board members handle the crisis directly, the crisis management plan can also provide protection behind the scenes. This can include insurance policies, such as general liability, directors & officers, cyber liability, and more, covering a wide range of liabilities.
Example: A non-profit may have general liability insurance to cover some potential crises while lacking more specific coverage. For example, organizations use cyber liability plans to cover the financial, reputational, and legal costs of recovering from a data leak, but this coverage is usually not included in general policies.
How to Create an Effective Crisis Management Plan
These steps can help non-profits review the best practices for making a crisis management plan:
| Crisis Management Step | Organizational Result | Insurance Preparation |
| Conduct Risk Assessments | Non-profits recognize the scope of their risks to physical assets, finances, cybersecurity, employee welfare, reputation, and more | General liability plans cover broad issues, from weather damage to theft, to provide a foundation for non-profit protection |
| Address Financial Duties | Board members stay informed and keep tabs on operations during the crisis, including regulatory requirements | D&O insurance helps ensure financial mistakes are covered |
| Review Insurance Protection | Directors can assess current protections before a crisis, preventing the costs of underinsurance as well as the impact of overpaying for unnecessary coverage | Contact a local insurance agency to review current liability limits and plans in the context of the non-profit’s needs |
| Form a Response Plan | The outline for crisis response procedures focuses on keeping assets safe while stabilizing operations | Speak with insurance planners about the potential impact of seasonal changes, like tourist activity, on your response plan |
| Conduct Internal Investigations | Investigations can uncover risks before they become a crisis, maintaining trust and potentially lowering premiums by increasing insurer confidence | Professional liability and D&O insurance policies help lower the risk of internal mistakes with volunteer, hiring, and financial practices |
| Review Regularly | Crisis preparation is not a single solution to issues, but a changing response to new conditions through regular reviews and provider comparisons | Partner with local insurance agents to conduct regular reviews of crisis management procedures, including insurance policy planning |
Local Teams Personalize Insurance for the Needs of Non-Profits
These steps can help non-profits create a template for their crisis management plan. However, each non-profit has different needs, and those in Hawaiʻi experience distinct seasonal changes, depending on their industries, related to weather conditions, tourist activity, and more.
The right crisis management plan helps non-profits lower their insurance premiums and respond quickly to issues before they get worse. Contact Atlas Insurance to learn how our local agents can use nearly 95 years of business insurance experience to help your non-profit form a customized crisis management plan for your needs.