Non-profit organisations share the same risks as for-profit organisations, so the easy answer is a resounding ‘yes‘.
Weather-related damage and fire damage can affect anyone, and appropriate cover can help to recover the costs needed for repair. This is without even considering any malicious property damage and theft which may occur.
Not only is insurance essential for protecting things like your shops and offices, but also members of the public who interact with your charity, as well as those who volunteer their time to help and those who are paid to.
Charities work hard to raise money for countless causes around the world, with the admirable intentions of making the world a better place. There are over 168,000 charities registered in England and Wales alone, and many of these charities may be small but they too can make a huge difference in their local area helping one person, one animal, or one tree at a time. When funds are crucial to the operations of your charity, can you afford to risk it all financially by foregoing insurance?
Each charitable organisation will face its own particular risks depending on its activities, and can therefore benefit from different types of cover. Insurance can be purchased using the charity’s funds, so that your charity has access to compensation should a claim be made against you or if you yourself need to make a claim.
What insurance do charities need?
Due to there being so many different kinds of charity activities, from events-based organisations to charity shops, there is no one-size-fits-all insurance package for charities.
Should you insure your charity shop and/or office?
As a charity, it may seem unlikely that you’ll be targeted by anyone, but there are a disturbing number of claims made by charity organisations. You may think that you can relax a little on your premises’ security —who would steal from a charity, right?— but sadly, criminals with no moral compass don’t discriminate from one “business” to another.
Shop insurance and/or office insurance primarily cover both the contents and the building itself. This means that any cash (up to a certain amount), stock and donated goods left in your charity shop overnight is covered in the event of a fire, a break-in, or any other insured peril. Similarly, if your charity operates from an office headquarters (whether it’s a home office at a normal residence, or in the middle of an office block), you can cover the equipment used for your charity operations, such as computers and office equipment. Office insurance also usually covers “business interruption” should, for example, a fire break out, damaging the property and office equipment and rendering the charity unable to continue operations until the property is restored and equipment replaced.
Do you need employers’ liability insurance for charity volunteers?
The only insurance that is legally required of your charity, if you have employees or workers, is employers liability insurance. Some small charities mistakenly believe that they are exempt from this law, as they have unpaid volunteers, but employers’ liability insurance is there to protect all employees – even those working in a voluntary capacity.
There are a couple of situations in which your charity may be exempt from having to purchase this type of insurance:
- The only people to work for the charity (on a full-time, part-time, temporary, voluntary, or apprenticeship basis) are closely related family members.
- Your volunteers or employees are based abroad. If this is the case, then you should check to see whether there are any legal requirements in the country those volunteers or employees are operating in.
Does your charity offer advice or services to the public?
If your charity offers advice to people (maybe people come in needing advice for a new business that they would like to start or personal advice about their mental health or relationship) and the advice given to them was poor and resulted in the person’s financial loss, then they can claim negligence. Professional indemnity insurance can help to pay for your legal defence and any fines and damages awarded.
This can include a situation in which your charity offers its services to help a benefit claimant with reading disabilities to fill out their applications or other forms, and a mistake is accidentally made on the form that leads to the person losing their benefits.
Public Liability Insurance for Charities
Public liability insurance is the most popular type of insurance for charities, as it covers a great deal of situations in which a member of the public may become injured or have their property damaged as a result of your charity’s activities. This includes fundraising events, such as sponsored runs, summer fayres, bake sales, and fun days, where your charity interacts with members of the public. Charity events insurance is essential whether you hold your event at a park, school, church hall, community centre, or shopping centre, as the event organiser is the one legally liable for any injuries which occur during the event – not the property owner.
Something as seemingly harmless as just shaking a donation bucket up and down the high street could lead to someone accidentally tripping over the bucket if you were to put it down, or even knock someone’s phone out of their hand if you bumped into them due to wearing a particularly unwieldy mascot costume. You may momentarily leave a pile of newly donated items in the middle of your charity shop floor while quickly grabbing your clipboard from the back, only to find when you return that a customer has tripped over this pile and significantly injured themselves.
Liability insurance covers the legal costs should you need to hire a solicitor, as well as any compensation owed if you are found to be at fault.
You might not think anyone would have the heart to sue a charity for what was an accident, but it happens more often than you know. Don’t risk your charity’s hard-earned finances on the faith that nobody would sue a charity.
Anything else you should know?
Remember: trustees and officers of a charity are legally treated the same as directors of a commercial business; they are personally liable for the organisation’s activities. You should see your charitable organisation in much the same way as any other organisation, and treat your insurance as such.
You should always carry out a risk assessment to determine what types of insurance are necessary for your particular charity.
For instance, if your charity does work abroad, then you may also want to consider travel insurance. If your charity owns or operates motor vehicles, for donation collections or transporting goods, it is compulsory to have insurance against property damage and third-party injury.
See our handy flowchart below, to help you get an idea of what insurance your charity may need: