Insurance and Liability

Insurance

Nonprofit Centers and Insurance

*We need more resources for this page! See the following questions regarding policy coverage, per square foot coverage, master lease, tenants, and vendors. Email info@nonprofitcenters.org with any resources you may have. Thanks!*

Online Resource Center

Certificate of Insurance – Girl Scouts of Orange County
David Brower Center License and Use Agreement
David Brower Center Event Contract Agreement

Topics Below

Policy Lists
Professional Liability Insurance or Umbrella Policy
Use Agreements and Insurance for Co-Working Space
Insurance Requirements
Certificate of Insurance – Community Meeting Space


Policy Lists for Building Owners, Tenants, and Vendors

For Building Owners
What kind of policies should you have? How much coverage do you have?
Here is a partial list of policies NCN members have generated from previous Ask-NCN questions:

  • Commercial Property Insurance – covers most risks to property, like fire, theft, and some natural disasters.
  • General Liability – covers liabilities imposed by lawsuits or other claims
  • Commercial Auto – which is not on an automobile just if I go out and hit someone on company time
  • Excess Liability – provides excess liability coverage, but only on that which is already covered by the underlying policy
  • Umbrella policy – provides excess liability and additional coverage not available in the underlying policy
  • Flood Insurance – coverage specific to flood damage
  • Directors & Officers Liability – coverage for board members of an organization should they be involved in an organization-related lawsuit

Is there a per square foot amount of coverage you should have?
Is anything different for you if you are not a building owner, but have a master lease on a property? How much coverage do you have in this case?

 

For Tenants
What should you require of tenants? Most nonprofit centers and coworking spaces require that their tenants carry insurance, but the amounts and policies vary. What do you require?

Sample Lease Clause from the Knight Nonprofit Center

Insurance. Tenant will at all times during the term of this Lease maintain general comprehensive public liability insurance against claims for bodily injury, death, or property damage occurring on, in, or about the Premises, such insurance to afford protection of not less than One Million Dollars ($1,000,000) with respect to bodily injury or death to all persons in any one accident, and not less than One Million Dollars ($1,000,000) with respect to property damage in any one occurrence, or such other amounts in excess of the amounts set forth above as Landlord shall reasonably request. Such insurance shall be primary as to all claims arising out, related to or in any way connected with Tenant’s lease or use of the Premises. Such insurance shall be written by companies of recognized financial standing which are well rated by a national rating agency and are legally qualified to issue such insurance in the State of Mississippi, and such insurance shall name as an additional insured thereunder, Landlord, or its assigns, and Tenant. Such insurance may be obtained by Tenant by endorsement on its blanket insurance policies, provided that such blanket policies satisfy the requirements specified herein. Landlord shall not be required to prosecute any claim against any insurer or to contest any settlement proposed by any insurer, provided that Tenant may, at its cost and expense, prosecute any such claim or contest any such settlement, and in such event Tenant may bring any such prosecution or contest in the name of Landlord, Tenant, or both, and Landlord shall cooperate with Tenant and will join therein at Tenant’s written request upon receipt by Landlord of an indemnity from Tenant against all costs, liabilities, and expenses in connection with such cooperation, prosecution, or contest.

For Vendors
What policies should you require of your vendors?

  • General Liability
  • Workman’s Compensation
  • Waiver of subrogation – The Waiver of Subrogation prohibits the insurer from attempting to seek restitution from a third party who causes any kind of loss to the insured. This type of arrangement is allowable under certain circumstances where the insured could be held liable for a claim that is paid. (from http://www.investopedia.com/terms/w/waiver-of-subrogation.asp)

Professional Liability Insurance or Umbrella Policy

Conversation from Ask-NCN, 4/17/15

Hillary Brooks, David Brower Center
Two liability insurance questions:
1. If your organization self-brokers its leasing deals and/or does its own property management, do you hold a professional liability insurance policy?

2. If your organization owns its facilities, particularly if you host outside guests often at events, do you carry an umbrella policy? If so, what’s the limit?

We’ve been advised that because we self-manage our property, leasing and tenant disputes will not be covered under our general liability plan. And we’ve also been advised to add an umbrella policy to better protect the big asset we have in our building. But our board would like to get a sense of what other nonprofit centers like us are doing, because some feel that taking this advice might possibly be overkill, and we certainly don’t want to overspend. Thanks in advance for sharing your knowledge.

 

Mike Gilbert, The Jones Center
We own and operate nearly 350,000 SF of space dedicated to nonprofit organizations plus a community center (215,000 SF with a few select tenants) with an ice rink, gym pool, conference center, etc.

We do not carry professional liability, and manage all properties and leases internally. (We also lease at less than 50% of market rate) Because of our lease structure, we do not anticipate disagreements in the lease arrangements and have a rather extensive lease agreement.
We also carry a $5 million umbrella policy. Our board would not consider waiving the umbrella requirement. We have many discussions about the cost of insurance and have always found that the coverage offers protection that our board feels is prudent. The difficult thing about insurance is that when you wish you had decided in favor of the coverage, it is usually too late.

We are also fortunate to have an insurance executive on our board.

 

Shelby Fox, Knight Nonprofit Center
I manage a 75,000 square foot multi-tenant nonprofit building with an attached 40K sqft warehouse
We hold:

  • Commercial property Insurance
  • General Liability
  • Commercial Auto – which is not on an automobile just if I go out and hit someone on company time
  • Excess Liability
  • Flood Insurance
  • And since we are on the Gulf, we have a named storm deductible buyback that we purchase to keep our deductible down if another Katrina occurs
  • We also have a D&O policy for the board members (Directors & Officers) to protect them from being sued

We also require all tenants to hold insurance. Below is how it is stated in the lease: (See above)

Vendors that work in the building have to have GL and WC and sign a waiver of subrogation. I would be happy to send you copies of anything you want to see.

 

China Brotsky
I’ve never heard of that idea of professional liability insurance for doing your own leasing. If its your broker who recommended it maybe you should check with your attorney.
On the other hand, umbrella liability policies are very standard for nonprofits and not just with nonprofit centers. We always had one at the Thoreau Centers for extra protection.


Use Agreements and Insurance for Co-Working Space

From an Ask-NCN Discussion, 8/12/14

Jane Guskin, A.J. Muste Memorial Institute
Since 1978 the A.J. Muste Memorial Institute has provided affordable office and meeting space in our New York City building to groups with
social justice missions.

For the past few years three small groups have been sharing one of our small offices, each with a month-to-month lease for “shared use and
shared occupancy” of the premises.

Our insurance broker told us each of the groups had to get their own liability insurance (for the same space), so we required them to do so,
even though the cost of insurance was a burden to them.

We are now looking to convert that office into a co-working space controlled by us, with use and access agreements (no leases) with four
small groups initially. We would like to cover the insurance directly since the space would be controlled by us; any additional insurance cost
to us would be incorporated into a “use fee” charged to the users.

Does anyone have examples of suitable use and/or access agreements which would incorporate liability issues and allow us to directly provide liability insurance coverage?

Also, would a membership structure be advantageous here? Any thoughts or resources are welcome.

 

Mara Williams Low, The Sobrato Family Foundation
We do have shared space, in addition to separately leased suites, for which we required a (somewhat) simplified license agreement as opposed to a lease. However, our lawyers and insurance carriers still mandate that each licensee maintain their own insurance as well. It may be that our counsel is just overly cautious, but I thought I would mention it in case you want to verify with your team if there are any risks to taking on all the liability for the space. We’re in California, which could also make a difference.

Best of luck with your changing model.

 

Tom Olivas, Girl Scouts Orange County
Good advice Mara. Jane-consult with your attorney and insurer before assuming any risk associated with the tenants.

 

Shelley D. White, Children and Family Services Center
We have the same arrangement as Mara, a license agreement that includes an insurance requirement.

 

David Lynn, Mission Edge
We used to require them to carry insurance as spelled out in their contract, and we had worked with a broker to facilitate the process for them.
However, for our actual fiscal sponsorship and incubation clients, we have now worked it out where we carry the entire insurance policy and pass on the pro-rated cost to each sub-entity, and have seen that it works out to be cheaper than what they could get on their own.

 

Thaddeus Squire, CultureWorks Greater Philadelphia
We have a month to month licensing arrangement with our members – 146 members share our space, from full (dedicated desk) members to transient members. We are tenants (master lease holders) in a larger office building, and we carry insurance for the space. But since members are month-to-month, we don’t ask them to carry insurance. Instead, we ask them to sign a waiver/affidavit that they are responsible for their property – they use the space at their own risk – similar to a gym.

We also provide CFS services, and as with Mission Edge, we fully insure those projects through a separate charitable trust, which set up to contain the liabilities for a CFS projects.


Insurance Requirements

From Ask-NCN 9/7/2017

Irene Sandalow, Sketchpad
We’re opening our space in October/ November and I am working with an insurance broker on insurance requirements for member organizations. This is what he suggested below. I was told by prospective member organizations and my attorney that this is very high.

What do you require your members in terms of insurance and coverage?
Member Organization Liability Requirements. Member Organization agrees, prior to occupancy, to purchase commercial liability insurance in coverage amounts that follows:

    • An amount equal to, but not less than $1,000,000 per occurrence and general aggregate of $2,000,000;
    • An amount equal to, but not less than $100,000 coverage for damage to rental property;
    • Member Organization also will name the managing agent of the property (Sketchpad) as additional insured on a primary and non-contributory basis without waiver of subrogation. ( THIS AMOUNT MAY BE INCREASED BASED ON THE TYPE OF BUSINESS YOU HAVE AND IS SOLELY BASED ON THE DISCRETION OF THE Landlord.)

Member Organization may also be required to purchase Abuse and Molestation coverage and professional liability. Situations where Tenant may be required to obtain such insurance includes, but is not limited to the following:

    • If the Member Organization has any direct contact on site with children, the elderly, mentally/physically disabled, or any other vulnerable population.

Member Organization agrees that Landlord will not be responsible in the event of any damage or loss of any Tenant property. Tenant agrees to hold Landlord harmless for any claim of loss or damage to any of Tenant’s property.

Member Organization agrees to sign waiver in favor of the managing agent of the property (Sketchpad)

 

Mariah Shell, The Alliance Center
Congrats on your upcoming opening!

That’s right in line with what we require for our tenants. I’ve attached a document that we share with tenants that outlines our insurance requirements and exactly what we need from them as it can be difficult for folks to understand if this isn’t something they deal with on a regular basis. Once in a while this level of insurance is too much for the potential tenant, but 99% of the time it isn’t a problem!

 

John Osborne, City of Edmonton
Our insurance requirement is for $2m per occurrence and full replacement of tenant improvements equipment and chattels.
Our lease includes an indemnity to protect the landlord.Not sure about the abuse and molestation insurance? Are you in the states?

 

Alan Ziter, NTC Foundation
Congratulations on your upcoming opening. ARTS DISTRICT Liberty Station in San Diego has this insurance information in our leases for ALL spaces, whether it is a 130 sq ft artist studio or an entire building. We haven’t had any tenant not sign a lease because of the insurance requirements….even though these are higher than what your broker suggested. We’ve never had any inquiry about Abuse and Molestation…..even with a number of dance, music and art groups working with children. Hope this helps.

 

Champagne Hughes, The Flight Deck
Our insurance is $1m in coverage. Getting insurance period can be daunting for some. We tend to require it for people using our theatre space but not those who are using the smaller rooms (i.e. office or rehearsal studio). It can be too much for them and has pushed people away. Congrats on your endeavor btw. 🙂


Certificate of Insurance – Community Meeting Space

Ask-NCN Conversation 12.5.17

Elizabeth Henrickson
I am interested in hearing from those of you that offer meeting space to your local nonprofits/community groups. Do you require that the organization that is hosting the meeting in your meeting space provide a certificate of insurance (COI)? How do you handle the liability of having an outside group using your space? Do you have an agreement that they sign?

 

Thaddeus Squire, CultureWorks Commons Management
Our spaces are restricted to our members’ use, all of whom sign an agreement and waiver. We of course carry GL insurance for the space. We do not rent to people/orgs outside our membership as it dilutes the value of membership and also increases exposure. We would rather not the administrative burden of requesting contracts and COIs for a 2-hour meeting room use, for example. Ours is just one approach – many spaces do outside rentals.

 

Amy Ward, Deschutes Children’s Foundation
We ask for a certificate of insurance. They also sign a use agreement that details their responsibilities. And we have a memo that covers our policies and guidelines. This covers things like cleaning, first aid, supplies, etc.

 

Laurie Rich, David Brower Center
We require all outside rental clients to have insurance and they must sign a contract outlining their specific event details and a license and use agreement outlining all legal language. I’m happy to email examples of these directly if it would be helpful.

 

Eric Plamondon, artspace
I wouldn’t mind getting a copy of this as well. We currently have no forms. And have been debating should we have one.

 

Nancy Osborn Nicholas, Together Center For any outside organizations we require a COI, charge an Administration fee (for cleaning set-up, etc), plus security deposit which will be returned if there are no problems and room rental rate.
For our campus partners, the use of conference room space is part of their lease for so many hours a month. If they need more, then we negotiate an internal rate, but don’t require COI as we already have it.

 

Laurie Rich
As a few have requested – I’m attaching our docs for all to review (see above under online resources.) Please note the executed contract does contain client details and should be considered confidential.


Last updated byNonprofit Centers Network