Our nonprofit committee has worked under the auspices of our city government, which covers all our functions under its insurance. If we become a separate 501(c)(3) organization, will we be liable for accidents or can we still remain under the city’s insurance?
As a separate organization, you will face the possibility of separate liability if your organization (or its agents) does something wrong. You may be able to negotiate with the City to get coverage under the City’s insurance or to get a commitment for indemnification if there is a claim against you. Even if you have such commitments, however, you may want your own back-up insurance and your own directors’ and officers’ policy.