What insurance does my charity need?

So, you’ve done the difficult bit. You’ve laid the foundations and got your charity up and running.

But that’s only the first hurdle. Because now you need to get down to the hard work of everyday operations and fundraising. Also, of securing your charity’s future so it can keep on doing its good work not just today but tomorrow too.

Which is where charity insurance comes in. And why you need an answer to the question: 'What insurance do charities need?'.

Now, we’re only too aware of how confusing insurance can be. And that insurers have a habit of making things worse by speaking in jargon.

Only it doesn’t have to be that way. Take out the long words and the legalese and the mist lifts. It becomes much easier to grasp what insurance does and how it works. Also, to decide what insurance your charity needs.

So, here really is a simple explanation of the cover your charity can rely on to help it flourish both now and into the future.

So, what insurance do charities need?

Precisely what charity insurance you need depends on what your organisation does and how it operates. Is there contact with the public? Do you offer a service or advice? Are employees or volunteers involved? Do you store personal information electronically?

All these things matter.

So, the simplest approach is to look at the different types of cover one by one. We’ll explain what they’re for, what they do and how they can protect your charity. We’ll even throw in examples of when you can call on your cover to help.

Charity public liability insurance

This is the obvious one. And you’ll need it if you have any dealings with the public. That could be anything from visiting people at home to them visiting you at your premises, or gatherings like coffee mornings.

Unfortunately, accidents happen. And whether that means someone tripping over an electrical lead at a group meeting or skidding on a puddle of water at a Christmas party, the outcome can be serious injury.

The same goes where damage is concerned. You could accidentally ruin someone’s expensive laptop either in their home or at your own premises by knocking over a cup of coffee. It happens.

Like it or not, we live in litigious times and the ‘where there’s blame, there’s a claim’ school of thought predominates. So, if someone says it’s your fault they were injured or their property was damaged, they could easily make a claim for compensation.

The bad news is that compensation claims can be for many £thousands, especially if someone’s suffered a debilitating injury. The good news is that charity public liability insurance pays for your legal costs and defence, as well as covering any compensation you owe.

Read more about public liability insurance for charities.

Charity fundraising event insurance

Fundraising provides a vital lifeline for charities. It helps bring in essential revenue so you can continue to do what you do best.

Although digital fundraising has mushroomed, fundraising events remain a crucial part of the mix. And whether it’s a fun run, a summer fete, a bake sale or anything else, it relies on members of the public getting involved.

As we know, humans can be accident-prone. And even taking into account the most rigorous of risk assessments, things can still go wrong. Like a rope snapping and the tea tent collapsing on top of those inside queuing for cake.

Happily, public liability can also do the job of covering your events. Some policies have limits on how many people can attend, and what your event can involve, so check the policy wording carefully. For example, some won’t cover activities considered more risky, like fireworks.

Here's more about charity fundraising event insurance.

Charity employers’ liability insurance

Got people working for your charity? Then you need charity employers’ liability (EL) insurance. It’s as simple as that. It doesn’t matter whether they’re full or part-time, doing work experience or on a temporary contract. The law says EL is a must.

It covers both them and you if someone claims they were injured or made ill by working for your charity. Say they slip a disc while bending to lift a heavy box. If they claim you didn’t train them properly and it’s your fault they got hurt, EL pays your legal costs and any compensation.

Another reason to buy EL, besides staying on the right side of the law, is that you can be fined by the Health and Safety Executive (HSE) for not having it. Up to £2,500 for each day you were meant to have it but didn’t, to be precise.

And you have your volunteers to think about. The HSE defines what an actual ‘employee’ is in very broad terms. Plus, you have a duty of care to your volunteers under civil law, meaning unpaid helpers can easily bring a claim against you if they allege your negligence harmed them.

Read more about charity employer’s liability insurance and volunteers’ insurance.

Trustee indemnity insurance

As a trustee you’re responsible for looking at the wider picture, taking decisions and helping to guide your charity’s direction. Individually responsible, that is, despite the fact you might be working alongside others.

That individual responsibility is important because it means you can be held personally liable if there’s a legal claim against your charity for any sort of wrongdoing. Perhaps there’s a question over misuse of finances. Or someone says your charity failed to pursue its stated aims.

Unfortunately, a trustee’s personal liability also puts your personal finances at risk. If a claim of wrongdoing against your charity is successful and there’s compensation owing, you’ll have to pay out of your own pocket – whether you're individually responsible for that wrongdoing or not.

Trustee indemnity insurance pays for a legal expert to represent you and covers costs, as well as picking up the tab for any compensation in civil cases. So, if you’re joining a charity as a trustee, check whether they have cover. And if you’re an existing trustee, you’d be wise to do the same - or you could find yourself exposed.

More about trustee insurance.

Charity professional indemnity insurance

Whether or not your charity offers any kind of service or advice dictates whether you need charity professional indemnity insurance or not. If you do, it helps protect you against legal claims that your actions were responsible for someone suffering financial harm.

Maybe you employed an agency worker to help out without checking their credentials properly. And that worker then failed in their care of a service user, leading to a claim of negligence.

Or your charity was employed on a contract basis to provide services to a local authority. Only that local authority then alleged you didn’t do all the things you said you would, and they didn’t get what they’d paid for.

If something like this happens, your charity professional indemnity insurance steps in to help. It pays for your legal defence and covers any compensation if necessary. And it does all that whether the allegation is valid or not.

Here's more about charity professional indemnity insurance.

Other types of charity insurance

Because there are always risks, whatever you do and however you do it, there’s more cover you can buy to safeguard your charity. There’s a policy to protect practically everything if you want to.

But bearing in mind most charities don’t have endless resources, here’s a quick run-down of the main contenders.

Property and contents insurance does pretty much what it says on the tin and acts in the same way as your home contents insurance. Only it covers your charity’s fixtures, fittings, IT and any other equipment you use. It’s especially important if you have your own premises or rely on certain kit.

If anything’s damaged (say by water), lost or stolen, your cover pays either for repairs or to replace items as new. You can also get portables insurance to protect the things you take around with you, like laptops and phones.

Combatting cybercrime

Cyber and data insurance is a good buy for charities that operate digitally, store donors' or clients’ information electronically, or have websites. It’s relevant even if you simply communicate by email. And who doesn’t do that these days?

It helps if you’re the target of cybercriminals who infiltrate your IT systems, or if a worker clicks on a malicious link that lets hackers in. The result can be crippled websites, stolen data and a serious blow to operations.

Cyber insurance helps by providing the technical expertise to get your IT up and running again and to restore systems. It can cover lost income while you can’t operate as normal. It also pays to deal with legal claims and regulator enquiries if a data breach means you lose people’s sensitive information.

Read more about cyber insurance for charities.

So that’s it. Simple, huh, just like we promised. However, if you do have any other questions about insurance for charities, feel free to give the team a call on 0345 222 5391.

Image used under license from Shutterstock.