Nonprofits run on trust. Donors trust you with their money. Volunteers trust you with their time. Your community trusts you to fulfill your mission.
That trust is the reason your organization exists, and it’s also what you stand to lose when something goes wrong.
A guest slips at your fundraiser. A board member faces allegations of mismanagement. A volunteer is involved in an accident while driving a client to an appointment. These aren’t unusual situations. They’re everyday risks that come with serving your community.
Because many nonprofits operate on tight budgets with limited staff, one uncovered claim can have a serious financial impact.
Let’s look at the insurance coverages every nonprofit should consider.
General Liability: The Foundation
If your nonprofit hosts events, welcomes visitors, or serves clients in person, general liability insurance is essential.
It covers third-party bodily injury and property damage claims, such as a guest tripping at your gala or equipment damaging a rented venue. Many venues also require proof of general liability coverage before they’ll rent you their space.
Directors & Officers (D&O): Protecting Your Leadership
Board members volunteer because they believe in your mission—not because they expect to defend against a lawsuit.
Claims involving alleged mismanagement, breach of fiduciary duty, employment decisions, or disputes among board members can affect any nonprofit. Without D&O insurance, board members may have to defend themselves personally, putting their own assets at risk.
Providing this coverage also makes it easier to recruit and retain qualified board members.
Property Insurance: Protecting What You’ve Built
Most nonprofits own more property than they realize. Office furniture, computers, donated equipment, program supplies, and important records all represent significant investments.
Property insurance helps pay to repair or replace these items after covered losses such as fire, theft, vandalism, or severe weather, so one unexpected event doesn’t erase years of hard work.
Employment Practices Liability (EPLI): Often Overlooked
If your nonprofit has employees—even just a few—you face employment-related risks.
Claims involving discrimination, harassment, wrongful termination, or retaliation can affect organizations of any size. Legal defense alone can become expensive, even if your organization did nothing wrong.
Cyber Liability: Protecting Sensitive Information
Nonprofits collect valuable information, including donor records, client information, payment details, and financial data.
Cyber criminals know many nonprofits have limited IT resources, making them attractive targets. A data breach can cost thousands of dollars and damage the trust you’ve worked so hard to earn.
Cyber liability insurance helps cover breach response, notification costs, and recovery expenses.
Volunteer Accident Coverage: Protecting Your Volunteers
Volunteers give their time to support your mission, but they usually aren’t covered by workers’ compensation.
Volunteer accident coverage helps pay medical expenses if a volunteer is injured while serving your organization, regardless of who was at fault.
Fidelity & Crime Coverage: Protecting Your Donations
No one likes to think about employee theft or embezzlement, but nonprofits often handle cash, checks, and donations with small teams and limited financial controls.
Fidelity and crime coverage helps protect your organization from losses caused by employee dishonesty. Many grant providers and boards now expect organizations to carry this protection.
Workers’ Compensation
If you have paid employees, most states require workers’ compensation insurance, regardless of your nonprofit status.
It helps pay medical expenses and lost wages when an employee suffers a work-related injury or illness.
Why “Nonprofit” Doesn’t Mean “Low Risk”
Many people assume nonprofits face fewer risks because they don’t operate for profit. In reality, many face greater exposure.
Nonprofits often serve vulnerable populations, rely heavily on volunteers, operate with limited resources, and depend on public trust. A single lawsuit, cyberattack, or negative headline can have lasting financial and reputational consequences.
That’s why nonprofit insurance shouldn’t be a standard small business package. Your coverage should reflect your programs, volunteers, facilities, events, and the board that leads your organization.
Build Coverage Around Your Mission
Every nonprofit has unique risks. The right insurance depends on the services you provide, the people you serve, the number of volunteers and employees you have, and the activities you conduct.
These coverages provide a strong starting point, but they aren’t a one-size-fits-all solution.
Hanby Insurance has worked with North Texas nonprofits since 1940. We’ll help you identify potential gaps and build coverage that protects your organization and the mission you’ve worked so hard to achieve.
To learn more, visit our nonprofit insurance page or call us at 972-285-0381.
Erin Neill is the owner of Hanby Insurance, bringing over 25 years of hands-on experience helping families and businesses across Texas find the right coverage. As a Certified Insurance Counselor (CIC) and licensed independent agent, Erin and her team work with multiple carriers to find policies that truly fit your needs.