Charity Insurance
Understanding charity insurance and protecting your nonprofit organisation
The importance of arranging the right charity insurances
Charity insurance will enable you to carry out services, events, and fundraising activities while also protecting your charity against liability claims, loss of assets, and allegations of wrongdoing. Unfortunately, your non-for-profit status and good endeavours does not remove your legal liabilities to employees, volunteers, trustees and third parties.
Non-profits, voluntary organisations, community interest groups and religious organisations will all need charity insurance protection to guard against financial risks which could damage the future of the organisation. As a charity you are exposed to several different types of risk which require you to consider a number of different covers.
Charity trustees need to ensure compliance with their legal and regulatory requirements, however they will also need to ensure they are personally protected with trustee indemnity insurance. The cover is important for any individual that makes decisions on behalf of a charitable organisation to guard against allegations of wrongdoing, breach of duties, and mismanagement.
Are there any legal requirements for charity insurance?
There are certain legal requirements for charities in the UK, although not all types of insurance are mandatory. The main drivers that you will need to consider when arranging insurance for your charity will more likely depend upon your activities.
It's however worth highlighting that employers liability insurance will be required, even if you don't have paid staff. Volunteers can still make a compensation claim arising from injury or illness if they don't perform their duties under a contract of service. Therefore this should be your first consideration, along with ensuring you provide a safe working enviornment.
What charity insurance do we need?
Each charity will have different insurance needs, how much cover you buy will depend on a variety of factors. These decisions will usually be made by the board of trustees with consideration given to the risks faced in carrying out the usual activities of the charity and the likelihood of a claim or loss occurring, while also considering the possible litigation settlement and costs of defending a claim made against the charity.
Employers Liability
Will offer financial protection to your organisation for compensation claims for injury or illness of your employees and volunteers.
Public Liability
Covers injury or property damage claims of persons other than your employees or volunteers in the course of your activities.
Trustee Liability
Offers protection to the trustees against civil, criminal and regulatory proceedings, while acting on behalf of the charity.
Trustee indemnity insurance quotes can start from £198 annually or £16.50 monthly for small charities.
Talk to a specialist charity insurance broker about your individual circumstancesWhat additional charity insurance covers should we consider?
Professional indemnity
Covers the cost of defending an allegation of professional negligence. The policy cover can protect against civil litigation whilst providing advisory, counselling, consultation or other services.
Property damage
Property insurance can protect your organisation's buildings, contents, stock, computer equipment and specialist equipment, against loss or damage from a range of insured perils.
Business interruption
The cover can provide income protection if the business is interrupted by an insured peril. Business interruption insurance will protect against the consequential loss of the interruption to trade by indemnifying against for the loss of income.
Cyber insurance
Protects your charity in the event of a cyber attack or data breach. Criminals will not discriminate and if you hold a significant amount of personal data or are reliant on your digital network, you could become a target.
Fidelity insurance
Protects your charity against dishonesty, theft, or fraud by employees. Employee crime insurance provides protection for financial loss, caused by an employee's criminal or fraudulent behaviour.
Money & personal assault
Protect your staff and volunteers when they are collecting donations. The cover can offer cover for theft of money and compensation for personal assault.
Should we buy public liability insurance for a charity event?
How does insurers calculate your charity insurance cost?
The cost of insurance for charities varies depending on what you do, what cover you want, and which insurer is providing the cover, there is no one-size-fits-all, your insurance should reflect your unique set of circumstances.
Cover for small charities can start at £198 annually or £16.50 month, for a basic insurance package that might include employers liability and public liability. However, it is recommend you also consider additional covers to protect your interests.
Our job is to assess your needs and find the insurance that matches those needs, while cost is a factor it is important to consider the value of the cover provided and to make sure you are not underinsured.
How to insure against employment disputes at a charity?
Employment related issues continue to be a significant cause of liability claims made against third sector organisations. Employement practicies liability insurance can be a valuable protection to guard against claims arising from a range wide range of employment disputes.