- Are you 100% sure your nonprofit’s cyber insurance will pay out when it matters most?
- Could one overlooked IT detail in your application lead to a denied claim—and months of recovery costs?
- What would it mean for your mission if your operations were frozen by ransomware for even just one week?
Nonprofits are built on purpose and trust. But in today’s digital world, that trust—and your mission—can be seriously jeopardized by a cyberattack. Unfortunately, nonprofits are increasingly on the radar of cybercriminals, precisely because they often lack the same level of cybersecurity resources as large corporations.
A recent study in Security Magazine found that 63% of small organizations have experienced a cyber-attack and 58% have suffered an actual breach. For nonprofits, this could mean donor data stolen, operations frozen, or the inability to serve your community for days—or even weeks.
That’s why cyber liability insurance is becoming a growing necessity for nonprofits. It’s designed to help cover the high costs of a breach, which may include:
- Legal fees, fines, and penalties from investigations or lawsuits (including donor or beneficiary complaints)
- Ransomware negotiation and payments if your systems are locked down
- IT recovery and data restoration costs to get your operations back online
- Notifications and credit monitoring for staff, volunteers, and donors
- PR and communication support to protect your organization’s reputation
- Coverage for service disruptions that affect fundraising, program delivery, or community outreach
- Liability for failure to protect sensitive data or deliver promised services
For nonprofits operating on limited budgets, a comprehensive cyber insurance policy can be a lifesaver after a digital disaster. But there’s a catch—and it's a big one.
Your Coverage Could Be Denied Without You Even Knowing Why
Most insurance policies now require you to have specific cybersecurity protections in place—things like multifactor authentication (2FA), secure password policies, employee training, and regular backups. The problem? Many nonprofit leaders sign off on having these protections without knowing if they’re actually implemented.
We’ve seen it time and again: the executive director assumes their IT person or MSP has these measures in place, but no one has verified it. If a breach happens, the insurer will audit your systems, and if they find out your organization wasn’t actually compliant, they may deny your claim outright.
That means all those protective benefits you were counting on? Gone. And your organization is left holding the bag.
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What Nonprofits Should Do Now
- Review your insurance application. Pull out the documents you submitted with your insurance agent and IT provider.
- Confirm your protections are actually implemented. Don’t assume—it’s critical to verify.
- Document everything. Insurance companies will look for proof you’ve maintained the protections you claimed to have.
To see what this looks like in action, take a look at how we helped CAIR California migrate to a secure, cloud-based infrastructure and boost their IT maturity. It’s a real-world example of how strong IT practices help nonprofits stay resilient.
How We Can Help
At TruAdvantage, we specialize in working with nonprofits, and we understand how critical it is to protect your mission—and your donor data. If you're unsure whether you're truly covered or meeting insurance requirements, we can help:
- Schedule a free consultation to review your current coverage and introduce you to a trusted cyber insurance expert.
- Get a FREE cybersecurity risk assessment tailored to nonprofits, to see where your gaps are and how to fix them affordably.
- Download our exclusive guide for nonprofit IT leaders to learn how to strengthen your technology and security roadmap: Nonprofit IT Leadership Guide
Your mission is too important to be derailed by a technicality. Let’s make sure your organization is protected—not just on paper, but in practice.
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Categories: NonProfit Orgs
