Most Texas nonprofits start with general liability and property insurance, then build from there based on how they operate. Directors and officers (D&O) insurance helps protect the board, employment practices liability (EPLI) addresses claims from paid staff, and volunteer accident, cyber and auto coverage fill other gaps. Texas does not require most private employers to carry workers' compensation, though a contract or funder may still ask for it.
Your grants, leases and event venues may add their own insurance rules, and a Texas charitable immunity law ties certain liability limits to carrying insurance. This guide explains what each coverage does, what Texas requires versus what is only recommended, what nonprofit insurance typically costs, and what to ask before you buy.
Thumann Insurance Agency can compare nonprofit insurance in Texas options across our carrier network. If you'd like pricing for your own organization, you can get a quote for your nonprofit or call (972) 991-9100.
What Insurance Does a Texas Nonprofit Need?
There is no single package. What you need depends on your activities, staff, volunteers, property and contracts. A practical way to start:
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Almost every nonprofit: general liability. Add property insurance if you own or rent space, or keep equipment and supplies.
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If you have a board: D&O insurance.
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If you have paid staff: EPLI, plus a decision on workers' compensation (covered below).
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If you work with volunteers: volunteer accident coverage, and a check on how your policies treat volunteers.
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If you provide advice, counseling, education or case management: professional liability.
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If you drive, or staff and volunteers use their own cars: commercial auto or hired and non-owned auto.
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If you collect donor or payment data: cyber liability.
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If you host events or serve children or vulnerable people: special event coverage and abuse and molestation liability.
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If you want higher limits: umbrella insurance.
Running a house of worship? Our church insurance page covers needs specific to churches.
What Does Texas Require, and What Is Only Recommended?
Texas does not require every nonprofit to carry every coverage, but it does tie some legal protections to carrying insurance. Contracts and funders can add their own rules. For the wider picture, see our guide to Texas business insurance requirements. This is general information, not legal advice.
Workers' compensation is optional for most Texas employers
The Texas Department of Insurance (TDI) says private employers in Texas can choose to carry workers' compensation insurance, and it is not required in most cases. Governmental employers are treated differently.
An employer that chooses not to carry it is called a non-subscriber. According to TDI's non-subscriber guidance, non-subscribers must post a notice of no coverage in the workplace, give written notice to new employees, and file a notice with the Division of Workers' Compensation. Employers with five or more employees must also report certain work-related injuries and illnesses. Opting out can change your legal exposure if an employee is hurt, so talk with an attorney before you decide.
Even if you opt out, a funder, client or contract may ask for proof of coverage. Workers' compensation is designed for employees, so volunteers are generally not covered. To compare options, see our workers' compensation insurance page.
How Texas Chapter 84 connects to liability insurance
Chapter 84 of the Texas Civil Practice and Remedies Code is the Charitable Immunity and Liability Act. For organizations that qualify as a "charitable organization" under the statute, it does two main things:
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It gives volunteers, including volunteer officers and directors, immunity from civil liability for acts or omissions within the course and scope of their duties, with exceptions (Section 84.004).
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It limits an organization's liability to $500,000 per person and $1,000,000 per occurrence for bodily injury or death, and $100,000 per occurrence for property damage (Section 84.006).
There is a condition. Under Section 84.007(g), those liability limits do not apply to a charitable organization that lacks liability insurance in effect at the statute's minimum amounts. The coverage must apply to the organization, its employees and its volunteers. The statute says it may be satisfied by a $1,000,000 bodily injury and property damage combined single limit policy.
A few more points are worth knowing:
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The Act does not apply to acts that are intentional, willfully negligent, or done with conscious indifference or reckless disregard for the safety of others.
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It does not limit the duties or liabilities of a board member or officer to the organization or its members. This is one reason many boards look closely at D&O insurance.
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Volunteers can be liable for injury or damage caused by operating motor-driven equipment, including vehicles, up to the insurance coverage that is required and any existing coverage that applies.
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The statute defines "charitable organization" specifically. Whether yours qualifies depends on its structure and purpose, so ask an attorney how the Act applies to you.
These figures are legal thresholds, not a recommendation for how much to buy. Your contracts, funders and risks may call for higher limits.
Requirements that come from grants, leases and venues
Many insurance requirements are contractual, not legal. Funders, landlords and event venues often ask for proof of liability insurance, a minimum limit, or additional insured wording that names them on your policy. Read each agreement before you buy coverage, and ask your broker to match the policy to what the contract says.
If you are a Thumann client, you can request a certificate of insurance through our online certificate form. To see what a certificate shows, read what a certificate of insurance is.
How we compiled this: common practice as described in insurance industry guidance, including Insureon's nonprofit insurance pages. It is not a legal rule, and your own agreements control.
The Main Nonprofit Coverages Explained
General liability insurance
General liability helps pay defense costs and covered damages when someone claims your nonprofit caused bodily injury or property damage, such as a guest who is hurt at a fundraiser. It generally does not cover employee injuries, professional mistakes, board decisions or auto accidents. Contracts, funders and venues often set minimum limits, so read them before you choose. Learn how this coverage works on our general liability insurance page.
Property insurance
Property insurance helps protect buildings you own, plus contents and equipment. Some policies also cover improvements you make to leased space. Wind, hail and flood can be limited or excluded, and flood is usually a separate policy.
In designated coastal areas, wind and hail coverage for commercial property may be available through the Texas Windstorm Insurance Association when private coverage is not reasonably available. See our commercial property insurance page and our guide to flood insurance in Texas.
Directors and officers (D&O) insurance
D&O insurance helps protect your board and officers from claims alleging wrongful acts, such as mismanagement or governance disputes. Many policies also cover the organization itself. General liability typically does not respond to these claims. Explore D&O insurance or read our article on D&O for Texas nonprofits.
Employment practices liability insurance (EPLI)
EPLI helps protect your nonprofit against claims from employees or applicants, such as wrongful termination, discrimination or harassment. Some policies can extend to volunteers, so ask. If you have paid staff, EPLI coverage is worth discussing.
Professional liability insurance
If your nonprofit provides counseling, education, case management or other advice, professional liability helps protect against claims of mistakes or negligence in that work. It is also called errors and omissions (E&O) insurance, and it is separate from general liability. See professional liability insurance.
Volunteer accident insurance
Volunteer accident insurance can help pay medical expenses when a volunteer is injured while serving. Workers' compensation is designed for employees, and general liability usually responds to claims by other people, so this coverage addresses a different gap. Ask whether it is offered inside a package or as a separate policy.
Cyber liability insurance
If you store donor records, payment details or client information, cyber liability coverage can help with costs after a data breach, depending on the policy. Review what it includes and excludes. See our cyber liability insurance page.
Auto and hired and non-owned auto insurance
Texas law requires liability coverage on vehicles, with minimum limits of $30,000 per person and $60,000 per accident for injuries and $25,000 for property damage, according to TDI's auto insurance guide. If your nonprofit owns vehicles, you need commercial auto insurance, and contracts may require higher limits.
If staff or volunteers use their own cars for errands, deliveries or client transportation, hired and non-owned auto (HNOA) coverage can help with the organization's liability for those trips. It covers third-party liability, not damage to the vehicle itself.
Because Chapter 84's volunteer protection has a motor-vehicle exception, vehicles deserve a close look. Our article on hired and non-owned auto insurance explains the gap, and personal vs. commercial auto insurance shows when a personal policy may fall short.
Special event insurance
Galas, races and festivals add exposure from crowds, vendors and venues. Special event insurance is typically written for a specific event and may help with guest injuries and property damage. Event cancellation is a separate coverage, so ask whether it is included. Venues may also require specific limits or additional insured wording.
Crime and fidelity insurance
Crime coverage, sometimes called a fidelity bond, can help with losses from theft or dishonesty by employees or volunteers who handle funds. Policies differ on who is covered and what counts as a covered loss.
Abuse and molestation liability
If you serve children, seniors or other vulnerable people, ask how your policies treat abuse and molestation allegations. This coverage is often purchased separately from general liability, with its own limits and conditions. Confirm the limits, who is covered and the policy's retroactive date.
Umbrella insurance
Umbrella insurance adds higher limits above underlying liability policies such as general liability and auto. Organizations that host large events or carry significant exposure may consider it. See commercial umbrella insurance.
How Much Does Nonprofit Insurance Cost?
Prices vary widely with your activities, size and location. As a starting point, these are typical premiums for nonprofits that bought policies through Insureon, a national online insurance broker:
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General liability: $42 per month ($500 per year)
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Business owner's policy (BOP): $82 per month ($981 per year)
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Workers' compensation: $62 per month ($739 per year)
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Professional liability: $56 per month ($674 per year)
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D&O: $67 per month ($801 per year)
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D&O and EPLI bundle: $126 per month ($1,508 per year)
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Commercial auto: $151 per month ($1,808 per year)
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Cyber liability: $130 per month ($1,557 per year)
The general liability figure reflects limits of $1,000,000 per occurrence and $2,000,000 aggregate, which Insureon says 93% of its nonprofit customers choose. It also reports that 69% of those customers pay less than $60 per month for general liability.
Treat these numbers as a rough guide, not a prediction. They come from one marketplace and are national, not Texas-specific. A nonprofit with a large building in a hail-prone area, public-facing programs or several vehicles can pay more.
Insurers commonly price nonprofit coverage based on:
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Your annual budget and payroll
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The number, size and type of events
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How many volunteers you have and what they do
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Whether you serve children or vulnerable people
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Property you own or lease, its value and its location
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Vehicles and drivers
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Claims history
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The limits, deductibles and endorsements you choose
Some smaller organizations may be eligible for a business owner's policy (BOP), which bundles general liability and property coverage, depending on the carrier and the nonprofit's operations.
Want a real number? Pricing depends on your programs, staff, volunteers, events and property. You can submit a quote request online or call us at (972) 991-9100, and we will compare options from our carrier network.
How we compiled this: premium figures are the typical (median) amounts Insureon reports for nonprofits that bought through its marketplace, taken from its "Cost of Nonprofit Business Insurance" page (updated May 8, 2025) and reviewed on October 17, 2026. We did not adjust them. They are not Texas-specific, they will change over time, and they are not quotes from Thumann Insurance Agency or any carrier.
How Texas Weather and Location Can Affect Property Coverage
Weather is part of the underwriting picture. Hail and severe storms are a common concern in North Texas, hurricanes and flooding affect the Gulf Coast, and winter freezes can damage buildings across the state. Some property policies apply separate wind and hail deductibles, sometimes calculated as a percentage of the insured value instead of a flat amount.
Ask your broker how wind, hail, water damage and flood are handled for your address, and whether any part of the risk must be insured separately.
How we compiled this: this describes common property policy features, not any single policy. Terms vary by carrier and policy, so read your own policy documents.
Questions to Ask Before You Buy
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Are volunteers covered under each policy, and in what situations?
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Does my general liability limit meet what my contracts and funders require, and what Chapter 84 may call for if it applies to us?
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Do any venues or funders need additional insured wording?
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How does the policy treat abuse and molestation allegations?
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What are the wind, hail and flood terms for our location?
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Is EPLI included with D&O, or is it a separate policy?
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Does auto coverage reach volunteers' or staff members' own vehicles?
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What are the main exclusions, and what limits and deductibles apply?
Already have coverage? Bring these questions to your next renewal, or request a commercial renewal review. If a term is unfamiliar, our glossary of common insurance terms can help.
How an Independent Broker Helps Texas Nonprofits
Thumann Insurance Agency is an independent insurance agency, so we are not tied to a single insurer. We work with 80+ insurance companies and compare coverage, exclusions, limits and cost for each client. Every client works with a dedicated Risk Advisor who takes time to understand how the organization operates before recommending coverage. We have served Texas businesses and families since 1996.
Carrier availability and eligibility depend on your organization's operations, location and underwriting, so options vary.
Frequently Asked Questions About Nonprofit Insurance in Texas
What insurance does a nonprofit need in Texas?
Most nonprofits start with general liability and property insurance. Depending on how you operate, you may also need D&O, EPLI, volunteer accident, cyber, professional liability or auto coverage. Needs vary with your activities, staff, volunteers and contracts.
Is workers' compensation required for Texas nonprofits?
In most cases, no. TDI says private employers can choose to carry workers' compensation, and it is not required in most cases. Employers who opt out must notify their employees and the Division of Workers' Compensation. A contract or funder may still require proof of coverage.
Does Texas law require nonprofits to carry liability insurance?
Chapter 84 ties certain liability limits to carrying qualifying liability insurance under Section 84.007(g). Contracts, funders and venues may add their own requirements. Whether Chapter 84 applies depends on your organization, so ask an attorney how it affects you.
How much does nonprofit insurance cost?
Insureon's data shows typical national premiums for nonprofit customers of about $500 per year for general liability, $981 for a BOP, $801 for D&O and $674 for professional liability. Texas premiums vary with your activities, location and property. For pricing based on your organization, request a quote or call (972) 991-9100.
Are volunteers covered by nonprofit insurance?
It depends on the policy. Workers' compensation is designed for employees, and general liability may extend to volunteers acting within their duties. Volunteer accident coverage is a separate option. Chapter 84 also gives volunteers of qualifying organizations immunity within the scope of their duties, with exceptions such as motor-driven equipment.
Does a nonprofit board need D&O insurance?
D&O is commonly recommended because general liability typically responds to bodily injury and property damage, not management decisions. Chapter 84 does not limit a board member's duties or liabilities to the organization. Whether you need it depends on your governance and risk.
What is the difference between a nonprofit and a 501(c)(3) for insurance purposes?
"Nonprofit" describes how an organization is structured. 501(c)(3) is a federal tax-exempt category. Insurance needs follow your activities rather than your tax status, though Chapter 84's definition of a charitable organization refers to 501(c)(3) and 501(c)(4) organizations, among other criteria. See the IRS guidance on charities and nonprofits.
Cost figures in this FAQ come from the Insureon data described in the cost section above.
Request a Nonprofit Insurance Quote
Ready for pricing based on your own programs, staff, volunteers, events and property? Request a Nonprofit Insurance Quote online, or call (972) 991-9100 to talk with our team. We will compare options from our carrier network. Options depend on eligibility, underwriting and carrier availability.
Author: Lauren Thumann, Director of Marketing
Last Updated: October, 2026
Sources: TDI Workers' Comp, Texas CPRC Ch. 84, TDI Auto Guide, Insureon Nonprofit Cost Data, IRS Charities and Nonprofits
Disclaimer: This article is general information compiled from public sources, including Texas statutes, state agency pages and third-party premium data. It is not legal advice, insurance advice or an offer of coverage, and terms vary by policy and carrier.