Whether it’s a community project or a niche counselling service, charities come with unique risks.
Here’s our guide to protecting your operations, from insurance required by law to specific cover for trustees, travel, events and buildings.
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You might be aware of the key covers and risks, but what’s required by law? What works for your charity activities? And why is something like public liability insurance so important?
Do I need to insure my charity?
You’re required by law to protect your charity’s assets and resources, and to put in place specific insurance if you:
- employ staff (see our note on volunteers, below)
- operate vehicles on public roads
This is the official guidance from gov.uk, but the charity insurance you need will depend on what activities you’re running.
Why do charities need insurance?
You’ll know already that charities carry a unique set of risks, mainly because of the diverse nature of their activities, set-up and who’s involved.
In some cases (see above), you’ll be required by law to have insurance. If not, it’s still important to consider protection, as it helps manage the risks connected with your charity’s money, reputation and any associated property.
For example, have you considered insurance for any of these common risks?
- loss of funds or damage to property/possessions
- travel insurance for any overseas operations
- fraud and dishonesty protection (known as fidelity insurance)
- providing a service, such as giving advice
- interacting with members of the public
- holding fundraising events
- working with volunteers
- defending any trustees
- interruption to your activities/loss of income
If any of these could apply to your charity, it’s important to think about charity insurance, and put a policy in place that covers your specific risks.
Do charities need public liability insurance?
The government advises any charities who own or occupy land or buildings, or who run fundraising events, to consider public liability insurance.
This important cover protects your charity against legal claims from anyone who might be injured or whose personal property is lost or damaged as a result of your activities.
Give me an example: a member of the public slipping on a wet floor, or damage to a village hall during a fundraiser.
Top tip: some venues may require a minimum level of public liability insurance if you’re planning an event or fundraiser. Check what’s required and what protection you already have in place.
Simply Business makes this easy, providing public liability cover as part of a tailored charity insurance policy.
Do charities need professional indemnity insurance?
It’s not a legal requirement, but a very important consideration for charities who provide a service, like giving advice or guidance.
If someone working for your charity gave incorrect information to a client, beneficiary or someone using your services, for example, they could potentially claim for negligence, or bad information. Professional indemnity insurance protects you and your charity against this.
Give me an example: incorrect advice being given during a youth work session, or claims for negligence during a counselling programme.
Do charities need employers’ liability insurance?
In most cases, employers’ liability is a legal requirement for charities who employ paid staff. It keeps you covered against claims from your employees, if they’re injured whilst working for you.
Charities who don’t comply with this law run the risk of being fined £2,500 every day, until they have the right cover in place.
- insurance for at least £5 million
- to buy insurance from an authorised insurer
- to display your insurance certificate prominently in your premises
These are legal requirements, so check before you buy and make sure your policy and provider cover all three.
Do volunteers need insurance? You might not be paying them, but many charities decide to take out employers’ liability insurance for their volunteers. They’re usually subject to similar risks as employees would be, and claims can get very expensive.
Give me an example: an employee tripping over a cable running across the floor, or a volunteer injuring themselves whilst operating machinery.
Types of charity insurance
As well as the three we’ve covered above, you’ll find a number of other key insurance types to factor in, depending on what your charity does and who it involves.
Alongside public liability, professional indemnity and employers’ liability insurance, do you need any of these? You can often set up a policy that includes as many particular covers as you need.
Trustee liability insurance
If you have trustees, this insurance covers the cost of defending them against allegations of wrongdoing, disqualification or extradition proceedings.
This might be for you, your staff or any volunteers, if you’re operating abroad.
Cover against fraud and dishonesty, if this is a risk for your charity.
Buildings and contents insurance
You’ll probably have thought about this, to cover the cost of repairing damaged property. Contents insurance covers you for theft, loss or accidental damage of your belongings.
Legal expenses insurance
If the worst does happen and you need a solicitor, or end up in court, this insurance covers the costs.
Business interruption insurance
If you had to stop operations, how would this impact your charity’s income? Business interruption insurance keeps you covered for this, for example if a flood stopped you from working.
From a car or van to a minibus for groups, any vehicles you’re using as part of your operations will need to be insured correctly, if they’re going on a public road.