FAQs

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Who qualifies for coverage?

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The Nonprofits Insurance Alliance Group provides liability insurance only for 501(c)(3) nonprofit organizations. Coverage is currently available in the following states:  Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Utah, Vermont, Virginia, Washington and Wisconsin.

What things should you consider when shopping for liability insurance for your nonprofit?

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If your insurance is coming up for renewal, it’s a good time to review and evaluate your options—and make sure your coverage fits your current needs. Have there been any significant changes in your operations, in the events you host, in the people you serve? Have you started a new program or acquired a new property? Hired new staff? These and other factors may affect your insurance requirements.

It’s also a good time to examine your risk management program. Do you have the resources you need to reduce the risk of injury or accident on your premises? Does your current insurance company provide free training, for example, to make sure your volunteers are trained in safety and risk reduction?

Never had liability insurance before?

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If you are a new nonprofit organization or expect soon to receive your 501(c)(3) status, this is the ideal time to learn about your liability options. Fill out the Get a Quote  form and take a moment to review our Coverages page. You might also want to sign up for a free webinar.

Not sure if you need liability coverage?

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No one ever wants to think about the bad things that can happen. But unfortunately, they do—someone slips or falls on your premises, a volunteer is injured in the line of assigned duties, an employee or officer is accused of misconduct. Depending on the financial hardship or damage to your reputation that results, your nonprofit mission may be seriously jeopardized. Be safe, not sorry. It doesn’t cost you anything to learn about your insurance options. If you operate an organization, your clients, employees, volunteers and the public deserve to know that you can compensate if you happen to cause injury.

How long does it take to get a quote?

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It can take up to 5 days to receive a quote.  Here’s why. To accurately determine the type of coverage you need, the risks of your organization must be evaluated which involves several steps. If you submit your basic information on the Get a Quote form, we provide it to a broker with experience in working with nonprofits (or one that you specify). The broker will then contact you and request additional information about your size, your operations, and key factors like whether or not you have volunteers, host events, or serve children or the elderly. This information will be included in the application submitted by the broker. Our team must then review, analyze and price the risk presented by your operations. Then your broker will develop a plan of options and discuss them with you.

What is the application process?

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Nonprofit Organizations

Applications for insurance from the Nonprofits Insurance Alliance Group must be made through an insurance broker. To inquire about whether your broker is authorized to work with us, please email us or call (800) 359-6422. Email us to request a Member Information Packet, or if you would like a referral to an insurance broker we work with in your area, proceed to Get a Quote.

Insurance Brokers

We work with selected independent insurance brokers. If you are interested in doing business with us, contact Susan Bradshaw sbradshaw@insurancefornonprofits.org, Vice President of Marketing and Member/Broker Services at (831) 621-6041. No new appointments are made in the months of May and June.

Why do you need a broker to get a quote?

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We provide coverage to nonprofits exclusively through qualified brokers. Having a broker is to your advantage because he or she is independent and can present you with multiple options based on your specific risks of potential loss or injury. A broker will help you understand policy limitations or additions that will affect the coverage.

A broker can also make valuable recommendations based on knowledge of the insurance carrier and his or her clients’ experience with them. If you don’t have a broker, we can recommend who has a track record of working for their client’s best interests.

How should you go about selecting an insurance broker?

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An insurance broker should be:

  • Experienced with regard to the special risks facing 501(c)(3) nonprofits and the insurance products best suited to protect them against loss.
  • Willing to take the time to learn about your agency’s operations and to provide thoughtful advice and counsel about your risks and insurance needs.
  • Assertive in advocating your interests.
  • Responsive to your changing needs. He or she should return your phone calls, assist with claims filing, notify insurers of any change, issue certificates of insurance, and assist with the design of risk management strategies.

If you don’t have a broker, we can recommend one with a track record of working for their client’s best interests. The brokers we work with consider each nonprofit’s unique risk profile. Some brokers may have an eye toward their best commission instead of what is really appropriate for a nonprofit. The brokers we recommend are expected to look out for your best interests.

What coverages do you offer?

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Our specialized coverages are designed exclusively to meet the needs of nonprofits.

  • General Liability (required of all our members)
  • Business Auto Liability
  • Non-owned Hired Auto
  • Social Service Professional
  • Improper Sexual Conduct
  • Directors and Officers
  • Umbrella Liability
  • Liquor Liability
  • Employee Benefits Liability
  • Auto Physical Damage (NIAC)

Available through companion programs:

  • Auto Physical Damage (ANI)
  • Fidelity
  • Foster Parent Liability
  • Participant/Volunteer Accident
  • Property
  • Workers’ Compensation

Is your pricing competitive?

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Since our beginnings 25 years ago, the Nonprofit Insurance Alliance Group has been committed to stable and fair pricing. Our members enjoy peace of mind, knowing they won’t be subjected to the dramatic and unanticipated price swings that can happen with for-profit insurance companies. Because many nonprofits operate on tight budgets planned far in advance, they value our commitment to protect them against unexpected premium hikes. That’s one of the reasons why 95% of our members renew with us every year.

How do you handle claims?

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We look for ways to cover claims within our policy, not for ways to decline them. If liability is clear when a claim is presented, we pay it promptly. We are partners with our members, and take seriously the trust they place in us to protect them. However, if liability is uncertain, we will thoroughly investigate and resolve the claim in a manner that is both conscientious and practical.

How are brokers compensated?

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Brokers receive a commission based on how much business they do with us. Our present commission structure is:

  • Less than $50,000 in liability premium = 7.5% commission
  • $50,000 or more in liability premium = 15% commission

Brokers who do less than $50,000 of business with us require significant additional time from our staff to answer questions and complete the application and renewal process; that’s why the commission is lower. Some insurance carriers refuse to work with brokers unless they have a “book” of many hundreds of thousands or even $1 million in premium from nonprofit business. We don’t have that policy. We believe it’s in the best interest of nonprofits to work with a wide range of qualified brokers. However, to work with these brokers efficiently, we find that we need to offer them a lower commission.
NOTE: The premium you pay to us will be the same regardless of the commission we pay the broker.

About Our Companies

Is your pricing competitive?

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Since our beginnings 25 years ago, the Nonprofit Insurance Alliance Group has been committed to stable and fair pricing. Our members enjoy peace of mind, knowing they won’t be subjected to the dramatic and unanticipated price swings that can happen with for-profit insurance companies. Because many nonprofits operate on tight budgets planned far in advance, they value our commitment to protect them against unexpected premium hikes. That’s one of the reasons why 95% of our members renew with us every year.

How do you handle claims?

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We look for ways to cover claims within our policy, not for ways to decline them. If liability is clear when a claim is presented, we pay it promptly. We are partners with our members, and take seriously the trust they place in us to protect them. However, if liability is uncertain, we will thoroughly investigate and resolve the claim in a manner that is both conscientious and practical.

What is the mission of the Nonprofits Insurance Alliance Group?

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The mission of the Nonprofits Insurance Alliance Group is twofold:

  1. To provide a stable source of liability insurance tailored to the specialized needs of the nonprofit sector, and
  2. To assist our members with programs, tools and training that minimize their risk, protect their resources, and save them money.

How are the companies in the Nonprofits Insurance Alliance Group organized?

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The Nonprofits Insurance Alliance Group is comprised of 4 distinct 501(c)(3) nonprofit organizations:

  • Nonprofits Insurance Alliance of California (NIAC) – Provides liability insurance to 501(c)(3) nonprofits in California—Founded in 1988, NIAC is a liability insurance pool.
  • Alliance of Nonprofits for Insurance, Risk Retention Group (ANI) – Provides liability insurance to 501(c)(3) nonprofits with locations outside California—Founded in 2000, ANI is a risk retention group.
  • National Alliance of Nonprofits for Insurance (NANI) – Provides property reinsurance—Founded in 2000, NANI is a captive reinsurance company.
  • Alliance Member Services (AMS) – Provides staff, services and support to the other three companies—Founded in 2000, AMS is a management company that provides staff and services to the other companies in the Group.

How does the Nonprofits Insurance Alliance Group differ from other insurance companies?

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We differ from other insurance companies in 6 key areas: mission, type of coverages, pricing, claims-handling, risk management services, and our dividend plan.

  • MISSION. Insuring nonprofits and protecting the nonprofit sector is our entire mission. We are 501(c)(3) nonprofits ourselves and we are governed by the nonprofits we insure. NIAC is a risk pool, not an insurance company. ANI is a Risk Retention Group.
  • COVERAGES. Our coverages are tailor-made for the unique needs of 501(c)(3) nonprofit organizations, including special events, liquor liability, volunteers, non-owned hired auto, counselors, social workers, and many more.
  • STABLE PRICING. We are committed to stable and appropriate pricing that protects our members from unexpected premium hikes.
  • INSPIRED SERVICE. If liability is clear when a claim is presented, we pay it promptly. Along with our quick response, our members value our personal touch and high standard of service. When you contact us, you will receive personal one-on-one service from a highly qualified and caring nonprofit insurance professional. We are here to help.
  • RISK MANAGEMENT. In 2014, we provided $2.5 million in FREE and highly discounted services to our more than 14,500 nonprofit members, including loss control consultations, driver training, labor and employment law support, sexual harassment training, and volunteer program training.
  • DIVIDEND PLAN. Over the past eight years, our members have received $34.1 million in dividends. This is because we exist only to serve our members. If our claims experience is better than anticipated, members benefit—not stockholders.

How does the dividend plan work?

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When we experience better than expected financial outcomes, we share it with our members! Over the past eight years, NIAC has declared $34.1 million in dividends for its nonprofit members in California. ANI is not yet of a sufficient size to begin paying dividends, but ANI members are already earning loyalty credits toward potential future dividends. For more information on this topic, visit the Dividend Plan page.

Who are your members?

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There are many different types of nonprofit organizations, but only 501(c)(3) federally tax-exempt nonprofits qualify for membership in the Nonprofits Insurance Alliance Group. Nonprofits we insure include: Community Centers, Senior Programs, Counseling Centers, Daycare and Youth Programs, Homeless Services, Hospices, Foster Family Agencies, Group Homes, Drug and Alcohol Recovery, Animal Rescue, Environmental Programs, Residential Programs, Arts and Theatre Groups and many more.

How did the Nonprofits Insurance Alliance Group get started?

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Our first company was founded in response to the insurance crisis of the mid-1980’s when many nonprofits experienced skyrocketing liability premiums, and in some cases were refused coverage outright. Our founder envisioned a different type of insurer—one that would partner with nonprofits to make them stronger and more effective organizations by pricing their policies fairly and keeping them stable. This partnership would go beyond responding to claims; it would include valuable resources and training to help prevent accidents and losses from happening in the first place.

It was a lofty goal and an untested premise. Many doors slammed shut, but with the financial backing of some forward-thinking foundations, Pamela Davis turned her U.C. Berkeley master’s thesis into a business plan and in 1989, launched the Nonprofits Insurance Alliance of California (NIAC).

A little more than ten years later, on the heels of unprecedented success in California and with $10 million in foundation grant money, we expanded the model into other states. Today more than 14,500 nonprofits in 32 states and the District of Columbia are insured by the Nonprofits Insurance Alliance Group.

Commitment to the Nonprofit Sector

Our fundamental purpose, the reason we came into existence, is to safeguard the interests of the nonprofit sector. Over the last 25 years, many of the policies and coverages we have championed are now considered standard in the insurance industry. As a result, never again will nonprofits be held captive to the commercial marketplace—we have nonprofits’ backs and they know it. An additional benefit our members value: dollars spent with us stay in the nonprofit community instead of lining the pockets of for-profit stockholders.

For a complete history of the Nonprofits Insurance Alliance Group, visit the History page.

Is the Group covered by reinsurance?

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The Nonprofits Insurance Alliance Group is conservatively reinsured by a group of highly rated reinsurers.

What special advantage does the Nonprofits Insurance Alliance Group bring to the nonprofit sector?

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Commercial carriers sometimes compete for nonprofit business and offer cheap rates during “soft markets,” that are later increased when the market changes. Unlike commercial carriers, the Nonprofits Insurance Alliance Group is committed to maintaining stable and appropriate pricing. We do this by relying on our extensive database of accident and injury claims which enables us to more accurately assess each nonprofit’s individual risk and set appropriate coverages.

What foundations provided the initial funding the companies in the Group?

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NIAC, founded in 1989 as a liability insurance pool, was originally capitalized with $1.3 in loans from the following foundations:

Ford Foundation
Wallace Alexander Gerbode Foundation
San Francisco Foundation
Walter S. Johnson Foundation
David & Lucile Packard Foundation
Marin Community Foundation

ANI was founded in 2001 as a risk retention group, which along with an affiliate captive reinsurance company was capitalized with $10 million from two foundations. Each of the following foundations contributed $5 million.

Bill & Melinda Gates Foundation
David & Lucile Packard Foundation

What is the Nonprofits Insurance Alliance Group’s A.M. Best rating?

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The Nonprofits Insurance Alliance Group is rated A VIII (Excellent) by A.M. Best. A.M. Best is the premier rating agency of insurance companies. NIAC, the first company in the Group, was one of the first insurance pools, or alternative insurers, to be rated by A.M. Best. The rating process involves a rigorous review of company operations, management, history and financial position.

According to A.M. Best, “The rating recognizes the group’s excellent capitalization and operating performance, strong management, and effective niche market strategy. It also considers the companies’ strategic roles and the benefits they derive as part of the Nonprofits Insurance Alliance Group.”

Brokers

Is the Group covered by reinsurance?

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The Nonprofits Insurance Alliance Group is conservatively reinsured by a group of highly rated reinsurers.

How do brokers get appointed?

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We work exclusively through select independent brokers and agents throughout the United States. To request appointment, please contact our Vice President of Marketing & Member/Broker Services at (831) 621-6041, or email sbradshaw@insurancefornonprofits.org.

What are brokers’ advantages of working with the Nonprofit Insurance Alliance Group?

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  • Ease of doing business: Secure 24/7 website for information exchange.
  • Productivity: Advanced technology tools like Electronic Data Interchange (EDI).
  • Inspired service: Fast, proactive response from specialized nonprofit insurance professionals.
  • Automatic renewal for small accounts.
  • Expertise: 501(c)(3) nonprofits are our only business.

Why do brokers’ nonprofit clients appreciate working with the Nonprofit Insurance Alliance Group?

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  • Exclusive nonprofit focus: all products and services especially tailored to the nonprofit sector by companies they control.
  • Stable pricing: No unexpected spikes in premiums.
  • Expert claim-handling: We look for coverage, not reasons to decline claims.
  • Risk management services save our members millions of dollars.

What commission is paid to brokers?

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Brokers receive a commission based on how much business they do with us. Our present commission structure is:

  • Less than $50,000 in force liability premium = 7.5%
  • Greater than or equal to $50,000 in force liability premium = 15%

Property premium written by North American Elite (NAE) is not included in determining commission for ANI/NIAC. The commission being paid on NAE property business remains at 10%.

NOTE: Commission is based on the total book of in force liability premium at year-end. Commission rates are reviewed at the end of each year.

If you have any questions about our policy, contact Susan Bradshaw, Vice President of Marketing and Member/Broker Services, at (831) 621-6041, sbradshaw@insurancefornonprofits.org.

Why are there two commission structures?

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Brokers who do less than $50,000 of business with us require significant additional time from our staff to answer questions and complete the application and renewal process; that’s why the commission is lower. Some insurance carriers refuse to work with brokers unless they have a “book” of many hundreds of thousands or even $1 million in premium from nonprofit business. We don’t have that policy. We believe it’s in the best interest of nonprofits to work with a wide range of qualified brokers. However, to work with these brokers efficiently, we find that we need to offer them a lower commission.

NOTE: The premium paid to the Nonprofits Insurance Alliance Group is the same regardless of the broker commission.

Are there any appointment requirements for brokers?

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Upon appointment, brokers are required to:

  • attend our Broker/CSR 60-minute orientation webinar, and
  • participate in CSR, Member Services webinar & EDI Training

For what states do you write coverage?

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The Nonprofits Insurance Alliance Group provides liability insurance only for 501(c)(3) nonprofit organizations. Coverage is currently available in the following states:  Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Utah, Vermont, Virginia, Washington and Wisconsin.

What is your appetite?

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There are many different types of nonprofit organizations, but only 501(c)(3) federally tax-exempt nonprofits qualify for membership in the Nonprofits Insurance Alliance Group. Some examples include: Community Centers, Senior Programs, Counseling Centers, Daycare and Youth Programs, Homeless Services, Hospices, Foster Family Agencies, Group Homes, Drug and Alcohol Recovery, Animal Rescue, Environmental Programs, Residential Programs, Arts and Theatre Groups and many more.

How do I submit a Broker of Record Request (BOR)?

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A Broker of Record (BOR) is a request from the nonprofit to transfer their account to a new insurance broker. Any BOR request must be approved by the Vice President of Marketing & Member/Broker Services before the BOR is processed. To submit a BOR, please be aware of the following:

  • The first step is to submit a BOR request letter to brokerservices@insurancefornonprofits.org. This letter must be signed by someone who is authorized to make insurance decisions at the nonprofit, such as a member of management or the board of directors, and it must be on the organization’s letterhead and include both the signer’s printed name and title.
  • Before we will accept a BOR, the nonprofit must be up-to-date on payments owed. If there is an outstanding balance, we will halt the process until payment is received.
  • If the nonprofit is on Agency Bill, we will ask the new insurance broker to confirm that they are willing to take responsibility before we proceed.
  • Once we have received a BOR request with an authorized signature, we send a notice to both insurance brokers informing them of the request.
  • The incumbent insurance broker has 3 days to secure a countermanding letter. If a countermanding letter is not received, the BOR will be processed.
  • If there are fewer than 10 days to the policy expiration, the existing insurance broker is requested to waive their 3 days to get a countermanding letter. If there are more than 10 days to the policy expiration, the existing insurance broker is granted 3 working days to obtain a countermanding letter from the member-insured, unless waived by the nonprofit.
  • If the incumbent broker informs us that they will not be seeking a countermand or if the three day allowance passes, the BOR will be processed.
  • Once processed, the new broker will receive an email advising that the policies have been released. Upon this notification, the policies can be found by logging on to our secure website.

In addition to these steps, please note the following:

  • We only accept BOR requests on active member-insureds. BORs are not normally accepted on new business, unless an exception is approved by the Vice President of Marketing & Member/Broker Services.
  • A BOR may be received and approved at any time during the policy term. However, we recommend that BOR’s be executed at least 60 days prior to the renewal of the insurance policy.
  • The new insurance broker must have other business with the Nonprofits Insurance Alliance Group and be an active insurance broker in good standing. If the new broker is not actively appointed with us, the BOR request may be submitted through one of our wholesalers.
  • Commission paid on an account subject to a BOR does not change. Resolution of any disputes regarding commission or other issues between brokers is the responsibility of the brokers themselves, and not ANI or NIAC.

What are some of the unique features of your coverages?

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General Liability

  • No Deductible (Standard)
  • Blanket Additional Insureds includes landlords, permits, mortgagees, volunteers, funders, lessors of leased equipment and charitable institutions.
  • Special Events included – charge may be made
  • Medical Payments Limit $20,000. An increase over the $5,000 or $10,000 limits commonly offered.

Directors and Officers

  • No Deductible (Standard—deductible options available)
  • Broad Employment Practices Liability coverage
  • FREE unlimited labor and employment risk management consultations for member-insureds

Improper Sexual Conduct

  • No Deductible (Standard)
  • Superior Event Trigger Coverage Form, not Claims-Made
  • Civil defense of alleged perpetrator until he or she is convicted of a criminal offense involving sexual misconduct
  • Coverage extends to client vs. client allegations

Social Service Professional

  • No Deductible (Standard)
  • Occurrence Form, not Claims-Made
  • Broad definition of insured includes the nonprofit itself as well as medical services providers for counseling, evaluation and nursing services if a volunteer or employee. Also includes all other employees and volunteers, as well as interns and students-in-training

Privacy & Cyber Coverage

  • Endorsed to the CGL policy – full policy limits unless otherwise stated
  • “Occurrence” includes identity theft, whether stolen electronically or from printed or written materials
  • “Crisis Management & Reward Expenses” – $10,000 sublimit for PR firms, ads and rewards related to a computer breach

Business Auto Liability

  • Hired auto physical damage included with Hired Auto Liability
  • Dedicated staff claims examiner assigned to auto fleets
  • FREE driver training (online, in person, and self-study)

Non-Owned/Hired Auto Liability

  • Excess over autos owned by your employees and volunteers
  • Minimum Premium $100 – ($5 – $10 per person otherwise)
  • Hired Auto Physical Damage available subject to deductible – eliminates costly daily physical damage waivers charge by rental companies.

Property

  • Minimum Premium of $250
  • Employee/Volunteer Dishonesty available on a specified limits basis (limits up to $500,000)
  • Business Income and Extra Expense restoration periods – 18 months

Accident

  • Covers all volunteers and participants engaged in activities of the nonprofit agency
  • Medical expense limits available from $10,000 to $250,000
  • Deductible options available from none to $250

What is the Nonprofits Insurance Alliance Group’s A.M. Best rating?

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The Nonprofits Insurance Alliance Group is rated A VIII (Excellent) by A.M. Best. A.M. Best is the premier rating agency of insurance companies. NIAC, the first company in the Group, was one of the first insurance pools, or alternative insurers, to be rated by A.M. Best. The rating process involves a rigorous review of company operations, management, history and financial position.

According to A.M. Best, “The rating recognizes the group’s excellent capitalization and operating performance, strong management, and effective niche market strategy. It also considers the companies’ strategic roles and the benefits they derive as part of the Nonprofits Insurance Alliance Group.”

How do I report a claim?

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Claims Reporting Procedure for ANI/NIAC Members

To report EMERGENCY claims during non-business hours, call (800) 856-7759.

If you have had any incident contact your broker and have them file a claim using the Acord Claim Form by email to newclaims@insurancefornonprofits.org.

Claims Reporting Procedure for ANI/NIAC Brokers

All new claims need to be reported through the broker.

Business Auto claims should be reported on Automobile ACORD loss notice.

General Liability claims should be reported on a General Liability ACORD loss notice.

Specialty lines claims (Improper Sexual Conduct, Social Service Professional and Directors and Officers) should be reported on the General Liability ACORD loss notice.

Property claims should be reported on the Property ACORD loss notice.

Using one of these ACORD Loss Notice forms, complete as much information as you have and send it, with any attachments provided to you by the insured, as follows:

New Claims: Submit all new claims to the Claims Department by email at:newclaims@insurancefornonprofits.org

For Information about an existing Claim: Call the claims examiner directly at the number provided by the Claims Department, or call toll free (800) 359-6422, prompt 6, and ask to speak to the claims examiner.

ACORD Forms must be filled out by the Broker and emailed to us:

Member-Insured Forms

Incident Report Form

Collision Report Form

Claims Instructions for ANI/NIAC Member-Insureds

Broker Forms

GL ACORD Loss Notice

Auto ACORD Loss Notice

Property ACORD Loss Notice

Note: Even if you are sending in an incident or accident for reporting purposes only, you still need to send a completed Loss ACORD.

Insurance Marketplace

What is the alternative insurance market?

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The property/casualty insurance market operates cyclically between soft markets when insurance is relatively available and affordable and hard markets when insurance capacity shrinks and prices increase, sometimes dramatically.

The “alternative market” of policyholder-owned insurance companies, like the Nonprofits Insurance Alliance Group, grew out of consumers’ frustration with the uncertainty in availability and affordability of insurance. Through these alternative market organizations, policyholders have learned that they can gain control of an important financial service and provide better insurance coverage at lower average rates. Industries, such as universities and colleges, hospitals and municipalities as well as nonprofits, have had success with alternative insurance. The success of the Nonprofits Insurance Alliance Group makes it evident that nonprofits have greatly benefited from embarking on this move to alternative insurance.

What is a charitable risk pool?

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A charitable risk pool is comprised of nonprofit organizations that qualify under section 501(c)(3) of the Internal Revenue Code. Like self-insurance, risk retention groups, and captive insurance companies, charitable risk pools are part of the “alternative” insurance marketplace. A fast growing sector, it is estimated that more than fifty percent of total commercial property and casualty premiums are now part of this alternative market.

What is a risk retention group?

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A risk retention group (RRG) is an liability insurance company that is owned by its members. Under the Liability Risk Retention Act, RRGs must be licensed by one state. The Alliance of Nonprofits for Insurance (ANI) is licensed by and domiciled in the state of Vermont. ANI chose Vermont as its state of domicile because it is known as the “gold standard” for regulating RRGs. Vermont is regarded as a thorough, but fair, regulator. Once licensed by its state of domicile, an RRG can insure members in all states in which it registers to do business. Similar to other insurance companies, RRGs typically retain a portion of the risk they underwrite and purchase reinsurance for large claims.

What is reinsurance?

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Insurance works because of the law of large numbers and the ability of insurance companies worldwide to share in the risk of loss by ceding to others a portion of the risk they undertake from their policyholders. Nearly every insurance company purchases reinsurance to assure that unusually large claims are shared. Three highly rated reinsurers (Swiss Re, Hannover Re and Aspen Re) reinsure member companies of the Nonprofits Insurance Alliance Group.