Plato taught that, “courage is knowing what not to fear.” For nonprofit leaders, it is critical to identify which risks deserve your attention and how to protect against them. Insurance is a tool you may not be fully utilizing.
Here are three critical threats—and what you can do to turn fear into confidence.
Cyber attack
What do Uber, 23andMe, LinkedIn, The City of Hamilton, DoorDash, and Jaguar Land Rover have in common? They are all victims of recent, highly publicized cyber-attacks.
Cyber-attacks are on the rise. Cyber criminals seek to cripple key systems, steal sensitive data or trick your organization into releasing funds. Thanks to AI, these attacks are reaching a new level of sophistication. In addition to being disruptive and costly, successful attacks are embarrassing, harming your organization’s reputation in front of customers and doners.
Protection: Strong IT controls and effective training can significantly reduce the likelihood and severity of a cyber-attack. However, even companies with excellent cyber hygiene are being breeched.
A good Cyber Liability policy limits financial exposure and partners your organization with world-class specialists who, in the event of an attack, deploy quickly to terminate the breach, re-establish network security, and help get your systems running.
Lawsuit against an executive or board member
While speaking at a conference for nonprofits recently, I asked the audience what they feared most… the most common answer? Lawyers!
Lawsuits are often unpredictable, stressful, and expensive. Senior executives and board members are sometimes surprised to learn their personal assets can be at risk when they are sued for decisions made on behalf of the organization.
Protection: Management Liability (also called “Directors & Officers Liability”) insurance with proper limits will cover legal defence costs and settlements or judgements (subject to facts and policy conditions).
Abuse allegation
This can be a difficult topic, but examining this risk is vital. Your organization can be liable for emotional, physical, or sexual abuse by an employee or volunteer. Because of the nature of sexual abuse, there is no time limit for bringing an abuse claim forward—it is not uncommon for an allegation to be made citing an abuse incident that occurred 30 years ago! Even the best policies and procedures cannot protect an organization from an incident that may have happened decades earlier.
Protection: Strong governance and clear abuse policies and procedures are a must for every organization dealing with vulnerable individuals. An Abuse Liability policy with proper limits will protect your organization from legal defense costs and settlements/judgements should an allegation arise.
As an Insurance Broker serving the nonprofit sector, I have seen first-hand how damaging these threats can be, but building proper defences is not difficult. Work with an Insurance Broker and other vendor partners who understand your sector to identify these risks and protect against them.
By conquering fear with preparation, you can lead with the courage your mission deserves.
Jonathan Bushey is a commercial insurance broker at Cowan Insurance Group, specializing in nonprofit clients. He takes a collaborative, service-oriented approach to ensure organizations get the right protection at a price that suits their budget. Looking for more information? Contact: jonathan.bushey@cowangroup.ca
