Why do charities need insurance?
An injured visitor
You run a small wildlife charity, rescuing both wild and domesticated animals. A member of the public brings you an injured fox they’ve coaxed into a crate. You ask them to help you carry the crate into a back room, and they trip over some cleaning supplies and cut themselves on the crate.
As a charity, having public liability insurance can help with defence costs and can even pay a resulting settlement.
Illness in the office
One of your volunteers begins to complain of respiratory problems. These seem to be exacerbated by coming into work. You work out of a village hall that you share with other companies. After investigating, it emerges that your employee’s illness has been caused by cleaning products not being stored in the correct way. Even though this mishap may not be your fault, the individual could still take sick leave and file a negligence claim against your charity.
For cases such as this, employers’ liability insurance could help to pay compensation and cover legal costs.
Volunteer mistake
One of your volunteers is keen to get involved with organising a fundraising event and sets to work sending emails to gather interest. Unfortunately, they accidentally attach confidential information to one of the threads. A breach of confidence complaint is filed against you, forcing you into legal proceedings.
Professional legal liability insurance can help with court fees. If relevant, it can also help to cover compensation payments. To discuss professional legal liability insurance, you’ll need to speak to us on the phone.
What is included in insurance for charities?
Not all insurance types may apply to your charity. If you’re looking for something specific, please call us and we’ll discuss your best options. We can help you find the right cover for your organisation.
Public liability insurance
As a charity, public liability insurance can provide support in the event someone makes a claim against you if they are injured, or their property damaged, in relation to your work. Public liability can help to pay compensation if they decide to sue you over it.
It can also help with covering the costs of legal fees, as well as any lost income from attending court.
Employers’ liability insurance
Employers’ liability insurance can help to protect your charity if an employee is injured or falls ill when working for your organisation. In fact, if you have employees at your charity, you may be legally required (external link) to purchase employer’s liability insurance. Charity volunteers are classed the same as employees under the law (external link).
There are some exemptions from EL, for example if you’re hiring family members or workers overseas. But it’s legally required by most businesses with employees.
Trustee liability insurance
Trustee liability insurance can help to provide financial support when dealing with compensation claims against trustees. Trustees and beneficiaries often hold greater responsibility and accountability. This means they can carry more risk.
The cover can help if a volunteer, service recipient or member of the public claims one of your trustees has acted wrongfully, breached their duty of care, or has been negligent.
Charities may also opt for other insurance types, such as professional legal liability insurance, cyber and data insurance, and office insurance.
Tell us a little more about your charity or organisation. We’ll help you to build your quote and explore any other insurance needs.
Build my coverInsurance for charities: FAQs
Do charities need trustee liability insurance?
Trustee liability insurance isn’t a legal requirement for a charity, but trustees do have a position of responsibility to uphold. For instance, if a trustee is accused of deliberate wrongdoing or illegal activity, they may be investigated by the Charity Commission. Trustee liability insurance can help to cover costs associated with defence and settlements.
Do charities need property insurance?
Property insurance could help to protect your charity, whether your organisation owns or rents its office buildings or support centres. Your workplace could be vulnerable to damage resulting from extreme weather, fire or a break-in. Buildings insurance with added contents cover can provide reassurance if you own the premises, while a combined office insurance policy can help if you rent.
If such an event were to strike, buildings cover can fund repairs, investigations and emergency services costs. There’s also portable equipment insurance for the tech and equipment you take out of the office too.
Do charities need insurance for events?
Your charity may decide to purchase insurance for charity events in addition to business insurance. Events are often an important part of fundraising and can be crucial to a charity’s income. But charity event insurance can help to protect you if one of your events doesn’t go to plan, for example if an attendee suffers an injury.
You would have to buy this type of insurance separately from a different Hiscox team. To discuss this further, you can get in touch with us. Find our telephone number here.
How much liability does a charity have?
The liability a charity and its trustees hold depends on the structure used to set up the organisation. For example, trustees of both charitable incorporated organisations (CIOs) and charitable companies have limited or no liability (external link) for the organisation’s debts or liabilities.
According to the NCVO (external link), the limited liabilities charity trustees can face include:
- Liabilities to third parties with whom they have a legal relationship
- Legal action by the Charity Commission or Attorney General over breach of trust
- Criminal liabilities (only in small number of specific situations).
Related articles and guides
What types of insurance do charities need?
If you run a charity and want to know what insurance is best for you our latest FAQ has all the answers you need.
Volunteer injuries: How insurance helped our client
Discover how Hiscox helped a client after a volunteer tripped and injured themselves while working on her premises.
Charity vs non-profit: What’s the difference?
Learn the difference between a charity and a non-profit with our blog. While similar, there are crucial differences between the two.