As a non-profit organization grows, it takes on new risks. Adding employees, hosting larger events, handling larger donations, and opening additional locations can all signal the need for new or updated business insurance. However, there is no one-size-fits-all solution to coverage gaps.
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This article reviews the essential business insurance types for non-profits, as well as additional policies that may become necessary as their services expand. Using these policies, non-profits can match the scope of their business to a more effective protection strategy for 2026 and beyond.
Important Insurance Industry Changes
Political and economic changes impact financial risk levels for non-profits in Hawaiʻi. According to recent figures, 74 federal grants worth over $126 million are currently vulnerable due to legal changes. The fields most affected are non-profits in environmental, educational, and human services, groups that are also most likely to rely on federal funding. In human services, for example, federal grants make up 36% of total funding.
With federal funding more uncertain than ever, non-profits in Hawaiʻi owe it to their mission, their donors, and their workers to prepare with stronger insurance solutions. These four steps can help them prepare.
Assess Changes to General Liability Risk
The foundation of a non-profit’s insurance protection is the general liability policy. This shields the business from claims resulting from normal activities from on-site injuries to reputational damage from lawsuits.
General liability policies often cover these areas:
- Bodily injury
- Example: A slip and fall accident, resulting in a lawsuit for medical expenses
- Property damage
- Example: Volunteers damage public or private property at an event, resulting in replacement costs
- Reputation damage
- Example: A donor sues the non-profit for slander, fund mismanagement, or another claim, resulting in legal defense costs
- Advertising damage
- Example: The non-profit is sued for accidental copyright infringement during an ad campaign
Insurance Action
Adjust the limits on the general liability policy to match the scope of the business. As a non-profit expands, general liability issues often become more serious. Adding a new location, hosting larger events, handling larger donations, or increasing the number of clients can all create more opportunities for accidents and lawsuits.
Review Existing Policy Coverage, Including Exclusions and Endorsements
Though general liability policies offer broad coverage, they also carry exclusions. For example, general liability often excludes high-risk activities, employee injuries, professional errors, and intentional damage. These require additional policies or endorsements.
Examples: A disgruntled volunteer purposely causes a spill that results in a visitor slip and fall. A high-risk activity, such as setting off fireworks during a fundraiser, injures an employee. These events would require additional coverage.
Insurance Action
Professional liability coverage can help in areas that general liability may miss. Identifying exclusions can help non-profits spot costly coverage gaps before they become liabilities.
Regularly Re-evaluate Coverage Limits and Specialty Needs
As a non-profit expands, new client demographics or services are often added. These can expand the reach of the organization’s mission, but may also bring new risks. This can range from introducing children or another high-risk demographic to its outreach or adding vehicles or new digital payment methods to operations.
Insurance Action
Add industry-specific policies such as cyber-crime insurance for data safety, or abuse & molestation coverage mitigates the risk of potential liability claims involving children. Proper non-profit policy coverage adapts to new risks or adds new policies, if needed, to fill coverage gaps.
Note: A non-profit’s personnel do not have to commit a crime to receive a liability claim. For high-risk demographics like children, the elderly, or the disabled, non-profits deal with increased scrutiny regardless of their actions. They can respond with more comprehensive coverage.
Consider Offering Health Insurance to Employees
Unlike for-profit businesses, non-profits are not required to provide health insurance to employees. However, offering health insurance to paid employees can demonstrate an investment in the well-being of personnel, helping attract and retain premium staff.
As the non-profit expands and progresses from volunteer labor to paid talent recruitment, health benefits may become a higher priority. Group plans or health co-ops may be more effective at serving an increasing number of employees, especially in high-risk demographics.
Insurance Action
Provide benefits to growing staff. Group life insurance policies can insure an employee group on one contract. Workers’ compensation coverage, which is required for paid employees, can be expanded to cover more medical expenses, wages, and legal defense costs. Even with 10 employees, non-profits can benefit from group disability insurance to protect themselves from unexpected costs.
Expand Your Insurance as Your Non-Profit Grows
Insurance plans should be updated as a non-profit organization grows, taking all areas of growth into account. High-quality business insurance helps attract and retain more talented teams, while safeguarding the organization’s reputation as it expands to new demographics, wealth brackets, or locations.
At Atlas Insurance, our team has served for-profit and non-profit businesses in Hawaiʻi for over 95 years with tailored insurance solutions. Our goal is to personalize coverage for each organization’s current needs, while leaving room to adapt and adjust as the business expands and conditions change.
Contact our team today and schedule a consultation to learn more about your policy options as your organization expands and what you can do to stay protected.