Understanding the Needs of the Hybrid Nonprofit Organization

The nonprofit of yesterday has evolved, and a new, hybrid nonprofit model has emerged, bringing with it an array of complexities.

Human services agencies and nonprofits across the country have recognized crucial needs in the communities they serve, and they are responding with an expansion of their services, allowing them to help their consumers in new and different ways. Whether it’s a community counseling center that is now offering physicals or an early-intervention program that has added a dental clinic, many nonprofits have expanded their missions to include medical services as a complement to their traditional social, counseling and support focuses.

This trend has created a great opportunity for independent agents to provide valued counsel to their nonprofit clients.

This surge of nonprofits providing medical services is caused by a variety of factors, including changes in the way nonprofits are funded, as well as research showing the significant role physical health plays in addressing the issues these nonprofits exist to address. These organizations often want to provide the best, most comprehensive service possible for their consumers, and addressing the physical well-being of their populations is a natural next step for many.

This trend is specifically common for organizations like community clinics, community behavioral health organizations and children’s programs, such as Head Starts or early intervention programs. Many counseling centers are no longer only offering counseling. Now, they’re offering dental care, vision care and physicals.

These new services come with additional exposures for the organizations, meaning medical malpractice coverage is often needed, in addition to traditional professional liability protection. The challenge for these groups is medical and traditional nonprofit coverages often do not come packaged together. This can leave gaps in coverage that can put the organization at risk of potentially costly claims. For agents, looking for a carrier that can seamlessly address both needs of this hybrid nonprofit can make a major difference in the level of protection for clients.

When nonprofits expand their services, there often are changes in reporting, medical requirements, insurance and legal issues. Training and expert advice can go a long way. Agents who are leading the way in this space often consider these four items when developing a comprehensive insurance program for these clients.

1. Reporting requirements may change. Reporting requirements will most likely change for nonprofits that expand their missions to include medical service(s) or expand across state lines. A nonprofit staff that is well-trained on the differences can help avoid potential issues.

2. The proper risk transfer contract is needed for any medical providers. Limiting the responsibility of nonprofits for the errors committed by specifically trained clinicians and medical professionals is critical. As a best practice, organizations should be sure the professionals they hire provide proper proof of risk transfer. When using an outside, independent professional, it is recommended that a signed contract outlining duties, deliverables and responsibilities is in place.

3. Medical malpractice coverage is necessary. As the best independent agents know, when nonprofits bring in clinicians, medical malpractice coverage is a necessity. If clinicians are employed as staff members of the nonprofit, the nonprofit’s insurance program should provide medical malpractice coverage. If the clinicians are independent contractors, it’s good practice to request a copy of their medical malpractice and professional liability insurance policies to keep on record. Solid contracts that address client service responsibilities, duties and insurance requirements, along with reviewing and documenting license records, can help best protect nonprofits.

4. The funder(s) may have insurance requirements. Insurance programs must meet the needs and requirements of the funder(s). Funder requirements may change when a nonprofit expands its mission. If it’s a government-funded program that is adding medical services, the requirements will usually change drastically. It’s important to obtain a copy of the contract between the funder and nonprofit to ensure the nonprofit’s insurance program is compliant.

Hybrid nonprofits need an individualized insurance program that can protect their expanded exposures, which presents an enormous opportunity for agents. The best agents understand the nuances between true medical malpractice and traditional professional liability policies, and when each is needed to fully protect their clients. It may not be in a nonprofit’s best interest to expect a traditional professional liability policy to be effectively endorsed to address medical malpractice needs.

There are often different coverage triggers between medical malpractice and traditional professional liability offered to nonprofit organizations. Agents bring a key value when it comes to understanding claims-made versus occurrence coverage triggers, and guiding nonprofit organizations through this critical issue.

Similarly, there are not many one-stop shops in the insurance marketplace to get the coverage that is necessary for a nonprofit that also offers healthcare services. Often, two separate coverage plans are needed. The best independent insurance agents are identifying the carriers that offer these two products as one comprehensive plan.

Beyond the proper coverages, independent agents are looking for carriers with risk solutions teams that have the unique experience to advise on both the nonprofit and healthcare areas as one. For claims in this arena, a specialized team that is experienced in handling claims for nonprofits that offer medical services is a major value-add for many nonprofit clients. This team can help them avoid major risks.

As a trusted adviser to nonprofit clients, experienced and knowledgeable independent agents are well-positioned to help their clients successfully navigate the sea of exposures that face the hybrid nonprofits of today.