Why Nonprofits in Central Texas Need D&O Insurance—And How It Protects Your Mission

Running a nonprofit is all about impact—making a difference in your community, supporting causes you care about, and serving others. But behind every great mission is a board of directors helping steer the ship. And with leadership comes responsibility—and risk.

That’s where Directors and Officers (D&O) insurance comes in.

What Is D&O Insurance for Nonprofits?

D&O insurance protects your board members from personal liability if they’re sued for decisions made while serving your organization. Whether it’s a dispute over misused funds, a claim of discrimination, or an issue with nonprofit bylaws, D&O coverage helps cover legal defense costs, settlements, and even reputational damage.

Real Risks Nonprofit Boards Face

Even the best-intentioned nonprofits in Central Texas aren’t immune to claims. Here are a few real-world examples of what D&O insurance helps protect against:

• Mismanaged donations – If funds are spent outside their intended purpose, your board could be held liable.
• Fiduciary breaches – Poor recordkeeping or lack of transparency can lead to legal trouble.
• Employment issues – Claims related to harassment, wrongful termination, or volunteer disputes.
• Bylaw or regulatory violations – Noncompliance with state and federal laws can put your tax-exempt status at risk.
• Conflicts of interest – If a board member benefits personally from a board decision, the organization could face serious consequences.

The Fallout: Why It Matters

A single D&O claim can lead to thousands in legal costs and untold damage to your nonprofit’s reputation. Worse yet, these lawsuits can pull resources away from your mission—jeopardizing your ability to serve your community.

How to Protect Your Board—and Your Mission

Good governance is your first line of defense. That means:

• Clear roles and responsibilities for your board
• Transparent financial reporting
• Ongoing board training on ethical practices and compliance
• Staying up to date on state and federal nonprofit regulations

But even the best-run nonprofits need a safety net.

Why D&O Insurance Is a Must-Have

D&O insurance gives your board peace of mind. It protects personal assets, supports your nonprofit’s financial health, and makes it easier to attract experienced, qualified leaders. After all, nobody wants to risk a lawsuit just for doing good.

At Dowd Insurance Agency, we help Central Texas nonprofits find the right D&O coverage to fit their unique needs. Whether you’re just getting started or you’ve been serving your community for years, we’ll make sure your board—and your mission—are protected.

Ready to protect your nonprofit’s leadership?

Contact us today for a free consultation.