Your nonprofit organization likely is seeing some adverse impact on your operations and revenues due to the COVID-19 coronavirus. In some cases, cash flow has been significantly impacted and payrolls may have been trimmed, either through reduced operating hours or, God forbid, necessary layoffs.
Your commercial insurance policies’ premiums are often based on your best estimate of your organization’s payrolls and revenues — estimates that were made months ago, and that could not have envisioned the impact of the coronavirus.
If you know that your revenues and payrolls are lower than you originally estimated, you should contact your insurance agent or your insurance company and request that your policies be “endorsed” now to reflect your changed situation. This will allow you to reduce your premiums NOW, and by doing so, be in a better cash-flow position. (Note that if you have volunteer insurance policies through VIS, this advice does not apply, because volunteers are not on your payroll, and your volunteer insurance premium is not determined by your revenues.)
If you do nothing, most insurance carriers will audit actual payroll and revenues a couple of months after any auditable policies expire, and return any overpaid premium a few weeks after that. But, in times like this, why wait to get what you actually are owed, and what you need now to operate?
Not all policies are auditable, but all policies can be “endorsed” to reflect changes in the basis on which premiums are determined. Make no mistake, if you received a large grant mid-policy term and were able to hire more staff, the insurance company would want to endorse your policies right away to begin charging the extra premium they would be entitled to get. Likewise, you should be permitted to reduce your premiums if your operations are adversely impacted.
Volunteers Insurance Service Association, Inc. (VIS) was established in 1972 for the purpose of providing insurance and risk management services for volunteer-based organizations. In addition to still providing these insurance services today on a nationwide scale, we have expanded to provide noninsurance resources for members to manage their risks and improve their operations. By transferring the volunteer risk exposure to our program, we can help you protect your organization. Contact us today at (800) 222-8920 for more information on our programs and services. Join now!