Risk management is an important responsibility of non-profit organization (NPO) directors. It can range from avoiding financial risk through proper planning and investing, screening potential volunteers to keep staff and served clientele safe, and holding sufficient insurance coverage.

While most NPO executives will consult their professional insurance provider for details on their particular needs, here we offer some general information on what to consider to be safe—and smart—about insurance coverage.

Insurance is not perfect and won’t cover every situation a charitable organization is likely to run into. It can also be expensive—especially when an overzealous salesperson recommends coverage you either don’t need or don’t want. But insurance is useful and in most cases, necessary to protect an organization from financial risk.

General Liability Insurance: This usually covers a long list of claims that could be filed against an NPO. Check for lists of exclusions and if necessary, purchase separate riders or endorsements that will cover items your organization’s activities warrant.

Auto Liability Insurance: If your NPO’s volunteers drive on behalf of the organization in either their own or company-owned vehicles, you’ll need insurance to cover them. Generally, auto accidents are not covered by a general liability policy, which offers coverage for the driver, property damage, the vehicle and injuries to others, as well as the possibility that the other motorist involved in the incident is uninsured.

Casualty Insurance: In generally, casualty insurance covers damage done by third parties, vandals, floods, fires,earthquakes and building failures. Consider whether volunteers use their own property, such as laptops and tools, in the course of their work for your organization.

Professional Liability Insurance: This coverage could be needed in cases of claims made by clients against professional or licensed services.

Director’s and Officer’s Insurance: In cases where a volunteer director’s or officer’s actions cause a claim to be filed against the organization, this coverage would be very valuable. It can also help attract board members, since they’ll have the peace of mind of knowing theiy won’t be personally responsible.

Again, insurance regulations vary by state. Checking with your insurance provider about whether or not your organization needs the above coverages is something you should consider doing sooner, rather than later—to reduce the risk of loss to your non-profit organization.

We’ve all heard the stories of nationally-known religious leaders who defrauded their churches for large sums of money. But there are countless untold stories of volunteers who damage smaller organizations in big ways. They range from PTA presidents to phony CPAs; from Board treasurers to thrift store cashiers. Their victims are programs designed to assist children and teachers, or the homeless, or youth sports associations. Nationally, non profits suffer great financial losses from corrupt volunteers.

Some dishonest people are on a mission to steal: they volunteer to gain access to an organization’s financial records. Others just find it too easy to take a little off the top when nobody’s looking. Some have gambling addictions; others steal for the thrill; still others just need the cash. Their communities and friends are always shocked by the criminal actions of these seemingly good people.

Fraud is a concern for all organizations—and you simply cannot tell a person’s character by appearance. Even articulate, outgoing, well-dressed, and happy-to-help volunteers can be deceitful—and folks who are good at lying can hide some very scary secrets. Luckily, fraud can be avoided with proper controls and procedures.

Volunteer screening is the first defense against fraud. Background screening is routinely performed by smart employers when hiring new staff. But it’s just as important for non profits recruiting unpaid help. The volunteer recruiter’s responsibility is to prevent monetary theft from the organization and to protect the people it serves, its staff, and its other volunteers. Volunteer screening is an easy way to protect the organization from those potential volunteers who have personal profit on their agendas, as well as those hiding violent or predatory pasts. It’s vitally important to screen potential volunteers for all of these issues.

Help prevent fraud in your organization with background checks. Proper volunteer screening will help keep your organization safe.

Be sure you have researched and resolved any legal issues that might be related to involving volunteers with your organization. Do any licensing requirements, insurance policies, or laws and regulations affect your use of volunteers in your organization. A review with your attorney is a great idea, just to be sure. Do your written company policies and procedures address the inclusion of volunteer workers? Make sure any needed items are in place before you begin recruiting, for a smooth transition.

As with other forms of background checking for tenant screening, or pre-employment screening, applicants for volunteer positions have the right to have the privacy respected, and to be treated fairly. Occasionally, criminal background reports contain incorrect information due to a variety of reporting errors, and applicants need to have the opportunity to challenge the accuracy of any information received. It would be proper to assume the information is correct until it has been corrected and a new report received, however. It is also important for nonprofit organizations to understand their responsibilities with regard to the information received. A good background screening company can assist with that information. In general, care should be taken to govern who has access to the information, how it is stored, and how it is destroyed once it is no longer needed.