Charities and community organizations don’t fit neatly into the mold of traditional commercial insurance, according to Carlene Forde (pictured), manager in the care and non-profit sector at Markel Canada.
While many small groups assume that a simple liability policy and a basic property package are sufficient, Forde stressed that the reality is far more complex.
“The core differences are in the mission and the risk profile of these organizations,” she told Insurance Business. “They operate with social missions, serving vulnerable populations, promoting education, and supporting community welfare. That becomes much more intimate than a standard P&C policy, which is typically just liability and property. Traditional policies are more profit-driven, whereas these organizations are purpose-driven.”
That purpose-driven mandate carries a different set of exposures, she said. Insurers, in turn, conduct a more rigorous review of mandates, policies, procedures, hiring practices, and even the frequency of training updates to ensure adequate safeguards are in place.
“There’s a level of thoroughness that’s needed with these particular organizations,” Forde said, pointing to requirements like vulnerable sector checks for new staff and volunteers. “It goes beyond coverage – it’s about making sure the organization is equipped to uphold the trust placed in them by their communities.”
Beyond the unique exposures, not-for-profits are also feeling the squeeze of broader market dynamics. While their purpose-driven missions might suggest insulation from traditional insurance cycles, Forde noted that the sector is very much subject to the same market forces – and in some ways, the effects can be more acute.
“Especially post-COVID, the insurance market has generally softened overall,” she said.
“But many of these organizations depend on donations – whether from government subsidies or the community – and when those donations fall off, the impact is direct. You’ll see staff turnover, programs scaled back, and in some cases, services that communities rely on simply can’t be offered anymore,” she added.
In other words, economic cycles don’t just affect the cost of insurance for non-profits; they ripple through the very services these groups provide. Tightened budgets and reduced funding can weaken organizational resilience at the same time as exposures are rising, creating a compounding effect that traditional commercial clients may be better equipped to weather.
Alongside funding challenges and exposure to market cycles, not-for-profits also face a shifting legal environment. Forde noted that claims activity has been increasing, and that the sector is not immune to the broader trend of rising litigation across Canada.
“I was speaking to one of our claims representatives, and he’s seen more and more of the types of claims that come in on a daily basis,” she said.
“Our society has definitely become more litigious when it comes to claims. I’m not sure if it’s coming off the pandemic or what has changed in the economy, but we’re definitely seeing that having an impact on some of the types of claims that we are seeing today.”
For organizations operating on thin margins and serving vulnerable populations, even a single claim can have serious repercussions. Beyond the financial strain, litigation can damage reputation, divert resources away from programming, and create uncertainty among donors and volunteers.
For Forde, insuring non-profits isn’t just about technical expertise or checking boxes on a policy form. Success in this niche requires empathy, adaptability, and above all, strong relationships.
“It’s imperative,” she said. “We’re dealing in a space that’s all based on relationship building. Having those soft skills is crucial for success in this area.”
Unlike other sectors, there’s no strict manual for underwriting or broking in the charity space. Market conditions shift, funding sources change, and organizations often launch new programs in response to emerging community needs. That makes education and communication central to the role insurers and brokers play.
“It takes a lot of conversation – constant communication between the insurance company, the broker, and the client,” Forde said. “It’s not an instance where you issue a policy renewal and then disappear until the next year. These organizations are delivering services year-round, and they need engagement throughout.”
At times, that engagement goes beyond traditional risk transfer. Some clients even reach out during the planning stage of new initiatives, seeking guidance on potential exposures and how to mitigate them. “That’s the way you’ll have success in this area,” Forde said. “It’s all purely based on relationship.”
