Every nonprofit has a life-cycle; some can be very long and last for many years, while others can be quite short in comparison. Nonprofits shut down for a variety of different reasons. One agency might dissolve due to a change in the market, another due to changing policies or guidelines, like we are experiencing with the new Department of State regulations. Some agencies merge with other firms to combine assets and/or save on accreditation costs, like we saw happen in 2008 when The Hague was ratified. Some directors may retire or are unable to continue providing services altogether due to the outright exhaustion or stress that directing a non-profit can cause, what some people refer to as the “burn out” factor.
When a nonprofit chooses to close its doors, it may require a special coverage that could add an additional unforeseen insurance cost. This is especially true for the nonprofit that offers specialized professional services like adoption, therapeutic foster care, mental or behavioral health, or skilled medical care. Professional services are insured under a specific type of coverage form called a claims-made policy and it responds differently to a claim then the traditional, better known and understood occurrence policy. Learn more