Start with the question nobody asks your board.
Your directors are volunteers. They make real decisions — approving budgets, hiring and firing an executive director, signing leases. And most of them have never been told whether they're personally protected if one of those decisions goes wrong.
That's where nonprofit coverage starts, and it's usually the first conversation worth having.
The four that matter
Directors and officers liability (D&O).
Protects your board members personally against claims arising from their decisions. This is the one nonprofits most often lack and most need — because the people exposed are volunteers who joined to help, and who'd be defending themselves with their own money.
General liability and property.
Someone gets hurt at your event. A pipe bursts in your office. The ordinary risks of occupying space and running programs.
Employment practices liability (EPLI).
Wrongful termination, discrimination, harassment claims. Small nonprofits are not too small for these — thin HR support and long-serving staff is exactly the combination that produces them.
Employee benefits.
Built for a nonprofit budget rather than adapted down from a for-profit plan.
The Maryland thing your board may have half-heard
Maryland recognizes charitable immunity — a doctrine protecting qualifying charitable organizations from tort liability.
Here's the part that surprises people: the immunity doesn't apply to the extent you carry insurance covering the claim. If you're insured for it, you can't assert immunity; the policy responds instead.
Sooner or later a board member reads that and asks the obvious question: doesn't buying insurance cost us our protection?
It's a bad trade, for five reasons.
· It only covers tort claims. Not contract disputes. Not employment claims. Not federal claims like civil rights actions. A large share of what actually hits a nonprofit falls outside it entirely.
· It protects the organization, not the people. Your board members' personal exposure isn't solved by the entity's immunity. D&O exists for a different problem.
· It doesn't pay for a lawyer. Immunity is a defense — someone has to argue it, in court, and you pay them. Insurance brings defense costs with it, and defense is usually the expensive part.
· It has to qualify. The protection depends on your organization meeting the definition. That's a question for a lawyer, and finding out you didn't qualify is a bad way to discover it.
· And it doesn't satisfy anyone else. Grant agreements, leases and contracts routinely require named coverage amounts. “We're immune” is not a certificate of insurance.
So: real doctrine, genuinely narrow, and not a substitute for cover. Worth knowing so that when it comes up at a board meeting, you can answer it.
That said — this is a legal question, not an insurance one. If your board wants to rely on charitable immunity, that's a conversation for your attorney, not your broker.
What grants and landlords will ask for
Funders and landlords frequently require specific coverage at specific limits before they'll sign. It's worth knowing what yours say, because discovering a requirement mid-application is a bad week.
Five things to check
1. Do you have D&O? If you don't know, you probably don't.
2. Have your board members been told what protects them? Most haven't.
3. Does your general liability cover the places you actually operate — including events held somewhere else?
4. Do you have EPLI? Ask if you have staff.
5. Are you over-insured anywhere? Every premium dollar is a dollar not going to the work. That cuts both ways.
That last one is the one brokers rarely raise. Adequate is the target — not maximum.
