Loss Control Tips: Nonprofit Organizations

Nonprofit organizations serve their communities by working toward furthering social causes or providing other public benefits. Through charitable donations and other forms

of fundraising, nonprofit organizations can help raise awareness on important topics and offer valuable resources or assistance to community members in need. However, operating a nonprofit organization also carries significant risks. These organizations have to manage numerous property and liability exposures, including working with volunteers, assisting vulnerable populations, serving food and drinks, hosting events or fundraisers, and leading various community initiatives. That’s why it’s vital to have effective loss control measures in place. This resource outlines common risks nonprofit organizations must address and offers helpful strategies to avoid possible claims.

Premises Liability

Nonprofit organizations are at risk of various liability concerns. For example, rental or property damage to a third party caused by a nonprofit organization or its

employees can lead to costly claims. In addition, injuries to volunteers, members, or visitors/customers could result in litigation. Therefore, it’s important for nonprofit organizations to take the following measures to limit their premises liability:

  • Keep the parking lot in good repair by conducting regular inspections and maintenance. Make it a priority to fix potholes, cracks, and other slip and trip hazards as quickly as possible. Maintain adequate snow removal and de-icing protocols throughout the property during winter months.
  • Ensure all floor surfaces in the building remain clean and dry. Place water-resistant rugs at all property entrances to eliminate slip and trip concerns from excess moisture during adverse weather conditions (e.g., rain, ice, and snow).
  • Make sure all emergency exits are properly marked and free of obstructions. Instruct employees never to block an exit, even temporarily. Post property signage that clearly outlines emergency evacuation routes and procedures.
  • Ensure proper food preparation and serving protocols are followed if the establishment hosts events where food is sold or provided.

Professional Liability

A work mistake, failure to provide promised services or alleged negligence can be detrimental to a nonprofit organization, as they could result in major lawsuits or financial losses. To minimize professional liability risks, nonprofit organizations can implement the following procedures:

  • Develop and implement an adequate vetting and application process for hiring both paid staff and volunteers.
  • Ensure a training program is in place for new staff members and volunteers. Volunteers should be partnered with experienced employees until they are able to demonstrate full competence in their designated tasks.
  • Establish adequate protocols for handling allegations of child molestation, sexual misconduct, or other forms of harassment against employees.