An Idea to Insure an Interesting Year

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A very ambitious ‘Event-Idea’ which will help nonprofits, senior volunteers, and even small businesses answer the question: “What type and how much Insurance do we need?”. This post is a placeholder to get some potential ideas.

Range Road 244 north of the NA as it drops down to cross Parlby Creek, Magee Lake NA, P. Potter.
Range Road 244 as it drops down to cross Parlby Creek, Magee Lake NA, P. Potter.
  1. Horses, Carriages, and Nonprofits
    1. Insurance is Such a Grownup Thing
    2. Insuring a Good Understanding
  2. Questioning the Role CPA Alberta and Community Ambassadors
    1. A Potential Role for CPA Alberta and Community Ambassadors
    2. Three Intentions
  3. What Happens Next
  4. 2024/25 Topics
    1. Foundational Topics
    2. Specialized Topics
  5. Notes, References, and Further Reading
    1. Further Reading

Horses, Carriages, and Nonprofits

Risk and profits go together like a horse and carriage [1]. An entrepreneur knows that profit is found in uncertainty. Negative uncertainty is Risk and positive uncertainty is Opportunity. Risk is mitigated and Opportunity is exploited.

Nonprofits also face uncertainty and need to balance Risk and Opportunity. The difference is the willingness to gamble. Nonprofits are (and should be) risk adverse. They are managing resources entrusted to them: donations, member fees, or grants. A start up may delay the creature comforts of employment in exchange for future company shares and profit distribution. Volunteers expect a meaningful social contribution and have less patience from the long-game.

Of course, the differences are matters of degree and exceptions abound. For/non-profits must evaluate Risks and mitigate them through a variety of means. One method to transfer risk is to buy insurance.

Insurance is Such a Grownup Thing

Insurance is one of those ‘grownup’ concepts that the average layman knows about but does not necessarily understand. Grown ups need insurance to drive a car, get a mortgage, or rent an apartment. A small fee, some unreadable documents, a pink slip or a piece of paper – and then you can forget about insurance until it is time to renew.

And then you join a nonprofit board…

Suddenly that same layman is being asked to decide on insurance products they have never heard of. Directors and officers, event, cancellation, misconduct, and the list goes on and is varied according to the services the organization is involved in.

Insuring a Good Understanding

The good news is that there is no shortage of content available to nonprofits on the topic, most of it is excellent. For Alberta nonprofits, one resource in particular stands out (and is made in in Alberta, resource: Insurance toolkit for the voluntary sector: a guide for non-profits and charities.

and all leads to the question, ‘how does this relate to my specific circumstance’?

Contextualization is the most challenging part of the insurance topic. Can a nonprofit in Alberta use a resource from Nova Scotia? How do resources from the United States apply to Canada. How do insurance needs differ between the different Non-Profit Flavours of Operational, Event, and Episodic nonprofits?

Is it possible to be over-insured? Can you have insurance but not be covered for your greatest risks due to policy exclusions? What is the role of provincial and federal legislation in protecting volunteers? How have the courts viewed liability and culpability of nonprofits?

Questioning the Role CPA Alberta and Community Ambassadors

CPA Alberta and Community Ambassadors (collectively, CPA Alberta) have a history of matching Chartered Professional Accountants (CPAs) to nonprofits and presenting topics of interest. It is proposed that CPA Alberta produce a program answering the question:

How much and what type of insurance do different nonprofits need in order to responsibly balance Risk against their limited financial resources?

A Potential Role for CPA Alberta and Community Ambassadors

Given the extensive content available to nonprofits, a conference simply rehashing the material does not make sense. Instead, the focus should be on providing context to the topic. The following program is proposed for CPA Alberta’s 2024/25 program year:

  1. Develop a series of short ‘courses’ in which an aspect of insurance and the nonprofit will be explored (see 2024/25 Topics).
  2. Wherever possible, existing content will be reused with permission of the content-owners; for example, a relevant YouTube video, printed material, or website.
  3. CPA Alberta’s role will be to aggregate content and match it to overarching themes, conduct a reasonable verification of its accuracy, and apply an overarching framework to contextualize the content.
  4. An optional certification will be offered to those completing the course to demonstrate they have a broad and basic understanding of the material.
  5. In Spring of 2025, a webinar/in person conference will bring the concepts together in which organizations and individuals can ask questions of experts in the field.
  6. The above resources will be considered as a proof of concept and potentially repurposed into a more enduring resource and for other topics.

Three Intentions

As noted above, the 2024/25 insurance program has two parts: short pre-conference courses and then an online conference to ask experts specific and more challenging questions. The ‘pre-conference’ portion of the program maximizes the benefit of the experts’ time (e.g., improves the quality of the questions).

The pre-conference portion is designed to be completed in about 1-2 hours of total time. There will be 6-12 ‘specialized topics’ focused on one thematic element (see a proposed list below). A single topic can be completed in less than 5-10 minutes. Although independent, the topics will build on each other. Concepts introduced in an earlier module are not redefined/explained in subsequent modules. Delivery of the content uses the principle of Smart-Phone-First. A course can be completed while standing in a particularly long grocery store line-up.

To recap, three intentions are noteworthy:

  1. All of those taking the program will have a ‘Basic-Understanding‘ of risk, legal, and insurance considerations.
  2. Individuals can opt to take none, some, or all the specialized topics relevant to their personal and organizational objectives.
  3. Completing the Basic-Understanding is the ‘price of free-admission’ to attend the Spring webinar. This ensures a minimum awareness (and effort) by the participants. Those who have not taken the programs can register for a small, nominal fee with any profits going to a charity.

What Happens Next

The above is an ambitious project and more than what one person or even a small team can hope to develop. As a result, a ‘virtual-production’ company will be created to develop the 2024/25 content and session. An evaluation afterwards will decide whether to continue with the model and use it for other content – or abandon it. Possible roles for this company include:

  • ‘The Board’: YEG-CPA Ambassadors, CPA Alberta, and Organizational Biology Consulting.
  • Overall Project Manager: Frank Potter
  • Advisory Panel: Experts from the insurance, legal, technology, Alberta Government
  • Spring Session Project Team: Frank Potter, and TBD
  • Production, Quality, and Continuity Team: Frank Potter, and TBD
  • Topic Project Teams: A small team asked to prepare one of the above topics. The will follow a standard format and can engage ad hoc resources as required.
  • Session and Topic Host: TBD

2024/25 Topics

Topics are either Foundational or Specialized:

Foundational Topics

  1. Nonprofit Legal Framework. What exactly is a nonprofit, what are the differences between provincial organizations and those that operate at the national level? Who can give charitable tax receipts and what are the common fiduciary and organizational obligations?
    • Time: 2-3 minutes for core material, 8+ minutes optional material.
    • Delivery Mechanisms: TBD
    • Producer: TBD
  2. Statutory Protection. What protection is given to nonprofits, their board members, and volunteers under provincial and federal legislation? What is the state of case law and how do the courts view nonprofits who have (not) acted in Good Faith. What exactly is negligence and Good Faith?
    • Time: 3-5 minutes for core material, 10+ minutes optional material.
    • Delivery Mechanisms: TBD
    • Producer: TBD
  3. Just Enough Insurance Knowledge. What exactly is insurance, where does personal insurance stop and business insurance begin? What are the general categories that a person or nonprofit will require in life? What are some of the more esoteric types of insurance?
    • Time: 8-10 minutes for core material, 6+ minutes optional material.
    • Delivery Mechanisms: TBD
    • Producer: TBD
  4. What the Worst Case Looks Like. The unexpected happens, an accident, fraud, or other incident occurs. What is most likely to happen to a nonprofit, board, or an individual volunteer?
    • Time: 2-4 minutes for core material, 6+ minutes optional material.
    • Delivery Mechanisms: TBD
    • Producer: TBD
  5. Cyber Insurance. Almost every nonprofit handles protected information and/or is a potential target for fraud. Ten years ago, the thought of buying insurance would have been a specialized topic. The pervasiveness of fraud and cybercrimes has moved this risk and type of insurance to a must consider topic?
    • Time: 2-4 minutes for core material, 6+ minutes optional material.
    • Delivery Mechanisms: TBD
    • Producer: TBD

Specialized Topics

As time and resources permit, one or more of the following specialized topics will be developed to supplement the above. Some may be moved into a Foundational Topic as interest and pedagogical design suggests.

  1. Where to Buy Insurance and What Will it Cost? What is a broker and how does insurance work? How to buy insurance and the pros and cons of shopping around for the best deal … and the best service in case there is a claim?
  2. How to Read a Policy. Great you have insurance… err, what does the dang thing cover exactly? What is (not) covered (e.g. exclusions); who is covered; and, how to make a claim? What questions should you ask your broker and how to get a clear answer?
  3. Care and Feeding of Your Insurance Company. While insurance companies want to sell you a product, they also want to keep you as a customer. What can you do to make the relationship positive and productive?
  4. Deep Dive Series. The following categories provide additional details on one topic of potential area for some nonprofits (and a few for profits!):
  5. – Accounting for Volunteering. Designed specifically for CPAs but applicable to other professionals, what personal coverage should you have if you are volunteering and acting in the capacity of an accountant for nonprofit.
  6. – Loss Coverage Insurance. One of three categories of insurance. This topic will provide additional details into these policies which provide coverage to items or places that a nonprofit owns.
  7. – Lawsuit coverage. Called liability policies, these policies cover an organization, people from a lawsuit, include Director, and Officer Insurance, Errors, and Omissions, etc.
  8. – Booze and an Event. An après-event may involve liquor. Beyond making sure no one drinks and drives, what other insurance considerations are there?
  9. – Children and Other Dangerous Creatures. Terrible things have happened to innocent children entrusted to organizations. What insurance exists from your national/provincial body and when should you consider Improper Sexual Conduct and Physical Abuse (ISCPA) coverage? Social Service Professional (SSP) coverage is a special form of Errors and Omissions coverage (familiar to most accountants) but tailored for when you are providing social services such as counseling, running a group home, etc.
  10. – Using Your Own Car. What are the considerations for using your personal vehicle for casual and less casual support of a nonprofit? How much does your personal insurance cover and when should the nonprofit provide additional coverage?
  11. – Volunteer, Staff and Employment Insurance. What insurance do you need for your human resources, paid or otherwise? What special considerations are there for volunteers and if you have paid staff members? Workers’ Compensation is an example for both. Employment benefits is an example of the latter.
  12. – Special Events and Cancellation. Almost every nonprofit will run a special event, even if it is not part of its core business. Fund raising galas, annual general meetings, or a volunteer appreciation are common examples in addition to concerts, races, sports tournaments, or cultural festivals. How are these insured and when is the insurance from a provincial or national association (not) good enough.
  13. – Business Interruption. Imagine your volunteers and donors are primarily from a single small town – and then it burns to the ground. Your services may be more in demand than ever, but your resources slashed – should you have business interruption insurance for your nonprofit?

Notes, References, and Further Reading

  1. Yes, I am alluding to that song. Perhaps best known as the theme song from the situational comedy, Married with Children.

Further Reading

1 thought on “An Idea to Insure an Interesting Year”

  1. I don’t have any expertise on this topic. I suggest that organizations approach more than one insurance broker for information, recommendations and pricing. Contacting similar organizations is another resource.

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