Precision Perspectives

Why Coverage Is Critical for Nonprofits

By Adamma DuCille | Precision Perspectives

Running a nonprofit can feel like walking a tightrope while juggling flaming swords: mission, funding, compliance, staffing, and community expectations are all in the air. The last thing you need is to fall off the rope because you weren’t covered. That’s why this edition of Precision Perspectives is focused on Insurance Matters — a cheeky double entendre, but a serious wake-up call. Because insurance does matter. And what you choose to cover (or not) can make or break your organization when the unexpected hits.

Why Insurance Should Be a Nonprofit Priority

The following scenarios demonstrate why determining if you need coverage, as well as what type of coverage your business needs is critical.

The $150,000 Potluck

On a sunny Friday afternoon, Meals That Matter, a beloved South Florida nonprofit, was doing what it did best—serving up hot meals with heart. Volunteers hustled to plate chicken, rice, and veggies for the 200 unhoused neighbors who relied on their weekly community dinner. Spirits were high, and the line stretched around the block.

But by Saturday morning, the phone started ringing. Then buzzing. Then blaring.

Dozens of clients were reporting stomach cramps, vomiting, and fevers. Emergency rooms filled with the organization’s regulars. By Monday, 50 people had fallen ill, 15 had been hospitalized, and one angry client had filed a lawsuit for medical expenses and emotional distress. The cause? Spoiled chicken. A walk-in refrigerator had quietly failed the night before, and no one caught it in time.

Unfortunately, Meals That Matter had no general liability or product liability insurance. They had always considered themselves low-risk—a shoestring operation doing good with donated goods. But goodwill isn’t a substitute for coverage. The lawsuit, coupled with reimbursing hospital bills and a city-mandated pause in operations, cost them nearly $150,000. Worse, one of their largest funders quietly backed out, citing concerns over the nonprofit’s risk controls.

What the Law Says

• Florida Statute § 768.136 offers limited Good Samaritan protection for food donations, but it doesn’t shield organizations from gross negligence—like failing to monitor food temperatures.
• FDA Model Food Code, adopted by Florida’s Department of Health, sets standards for safe food storage and handling—even for nonprofits.
• If the nonprofit had collected and stored client health data during the incident, they could’ve also triggered HIPAA compliance issues and potential federal penalties.

The Lesson? Insurance isn’t just for worst-case scenarios. It’s for the real-world risks nonprofits face every day. One meal turned into a mission-threatening crisis—and without a policy in place, the cost wasn’t just financial. It was reputational, operational, and deeply personal.

The Broken Arm That Broke the Budget

Active Futures was a small but mighty nonprofit running a sports and wellness program in Broward County. Their mission? To help middle schoolers stay active, build confidence, and have fun after school. Every Tuesday and Thursday, they brought soccer balls, hula hoops, and high energy to a local community center that doubled as an after-school hub.

Then came the fall—literally.

During a routine obstacle course challenge, one of the students, 9-year-old Jalen, tripped on a frayed edge of an old gym mat. He landed awkwardly, his wrist taking the full brunt of the fall. The pop was audible. So were the screams. An ambulance was called, and the X-ray confirmed it: Jalen had a clean break in his arm.

His parents, both deeply supportive of the program, were nonetheless stunned to learn that Active Futures carried no general liability insurance, no accident insurance, and had no incident protocol in place. The medical bills exceeded $6,000, and their attorney soon followed up with a letter—seeking damages for negligence, emotional trauma, and loss of recreational opportunity.

The nonprofit scrambled. Between legal fees, the settlement, and canceled programming during the investigation, the total cost topped $85,000. A grant renewal that was in the pipeline quietly evaporated, and trust with partner schools took a hit.

What the Law Says

• Florida Premises Liability Law holds entities accountable when an injury occurs due to unsafe or poorly maintained environments—even if the property is shared or rented.
• Florida Statute § 768.28 outlines limited immunity for governmental entities, but not for nonprofit contractors or partner agencies.
• The Volunteer Protection Act of 1997 (42 U.S.C. § 14501) protects individual volunteers from liability under certain conditions, but does not shield the organization from claims of negligence.

The Bottom Line?
One accident was all it took to expose Active Futures to serious risk. Insurance could have covered the medical costs, mitigated legal fallout, and kept programming on track. Instead, a momentary stumble turned into a cautionary tale—and a very expensive lesson in what it means to be uninsured

Key Takeaways:

In both cases, the absence of appropriate insurance coverage didn’t just expose the organizations to financial and reputational risk—it directly undermined their mission. Insurance isn’t just a legal safeguard; it’s a strategic asset that helps nonprofits respond with care, credibility, and continuity.

Too often, insurance is treated as a boring administrative chore. But here’s the truth: it’s a core part of your risk management strategy. Whether you run a grassroots community collective or a multi-million-dollar foundation, the risks are real. Fires, lawsuits, data breaches, vehicle accidents, injured volunteers—any of these can derail your mission if you’re not protected.

Having the right coverage isn’t about fear—it’s about foresight.

What’s at Stake Without It?

• Costly legal settlements or fines
• Damage to your organization’s reputation
• Loss of funding or revoked grants
• Board liability and personal financial exposure

Nonprofits can’t afford to be reactive. Insurance allows you to lead with confidence.

So… Does My Nonprofit Need Insurance?

Short answer: almost definitely. But the right type and amount depend on your size, structure, activities, and staffing model. Here are some key questions to ask:

• Do you have employees, volunteers, or contractors?
• Do you rent or own office/event space?
• Do you operate vehicles or transport people?
• Do you host events or engage with the public?
• Do you handle sensitive client or donor data?
• Are you governed by a board of directors?

If you answered yes to even one of these, you need coverage. And probably more than one kind.

Key Types of Insurance That Matter

1. General Liability Insurance Covers claims of bodily injury or property damage. This is your foundational protection and often required by landlords and funders.
2. Directors & Officers (D&O) Insurance Protects board members and executives from personal liability related to decisions made on behalf of the organization.
3. Workers’ Compensation Insurance Required in most states if you have employees. Covers medical costs and lost wages due to workplace injuries.
4. Professional Liability (E&O) Insurance Especially important if your nonprofit offers counseling, advisory, or direct services. Covers negligence claims.
5. Cyber Liability Insurance As digital threats increase, this coverage helps mitigate the cost of data breaches and cyberattacks.
6. Property Insurance Covers physical assets like office equipment, supplies, or buildings against theft, fire, or damage.
7. Event Insurance A must-have if you host public events, conferences, or fundraisers. Covers accidents, cancellations, and liability.

How to Choose the Right Coverage

The key isn’t just getting insured—it’s getting the right insurance. Here are five smart moves:

• Start with a risk assessment. Identify vulnerabilities across operations.
• Talk to a broker who specializes in nonprofits. They’ll know the nuances.
• Review your contracts and grants. Some funders require specific policies.
• Involve your board. Especially in D&O discussions.
• Reassess annually. Your needs evolve as your mission grows.

Final Word: Protection Powers Progress

Insurance may not be glamorous, but it is a powerful enabler of sustainability. It lets you focus on the work that matters, knowing you’re protected from the what-ifs. In the end, insurance matters because your mission matters. And if you’re serious about building something that lasts, then safeguarding your organization isn’t optional—it’s essential.

Now, go check your policy. Or get one. Your future self will thank you.