In the Chicago area, nonprofit agencies are still turning to more hazardous events to raise funds because that's what seems to get the public's attention, says Chris Finkley, vice president of insurance operations for First Nonprofit Insurance Co.
Recently, an insured approached First Nonprofit about an event it wanted to host for participants in one of their youth programs at a recreation facility called Xtreme Trampoline.
"After having our risk-management VP check it out, we persuaded them this was not a good idea," says Finkley. "The potential for severe injury on a trampoline for the inexperienced user can be significant, and the waivers required by the venue passed a lot of responsibility back to the participant."
A real big issue among nonprofits is what happens when funding runs out, Finkley says. First Nonprofit has seen several smaller agencies go out of business, and several others have merged with larger nonprofits.
"The M&A activity creates a double-edged sword in some regard, because services will continue to those in need—but now the character of the surviving agency is different," he says. "And if coverage is on a claims-made basis, securing coverage changes can be tricky."
First Nonprofit has been trying to bring pricing up to keep pace with the increased operational costs it's facing from its reinsurance programs, Finkley says: "Unfortunately, with funding still down and demand for services rising, nonprofits are still getting squeezed and still shopping their insurance programs in an effort to save wherever they can."
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