What type of insurance do charities need?

Charities in the UK face similar risks to businesses and may require various types of insurance to protect their operations.1 Like companies, charities can face legal action if someone is injured on their premises or if property is damaged during their activities.2

Common types of insurance for charities include employers’ liability, public liability, property damage cover, and trustees and individual liability. Some might be required by law, while others are optional but can help protect against unforeseen costs.

The insurance a charity needs depends on factors such as staff employment, the nature of its work, its use of volunteers, and its equipment ownership.

 

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Why do charities need insurance?

Charities face a range of risks that could lead to direct financial loss or third party claims for legal compensation. Staff may be injured at work, valuable equipment could be stolen from your office, or guests might be harmed at charity events. Insurance can protect charities from the potential impact of these incidents.

Staff injury

Employers’ liability insurance can help cover claims from employees or volunteers who are injured or become ill because of their work for you. For example, a staff member could develop repetitive strain injury from using a computer or experience stress-related illness due to their job. Employers' liability insurance can help cover compensation awards and your legal defence costs.

Stolen equipment

Contents insurance can help protect a charity’s possessions if they are stolen from or damaged at that charity’s premises. For example, a community centre with computers, audio-visual equipment, and other technology may face significant replacement costs if targeted by thieves. Contents insurance can help cover these losses.

Policies typically cover office equipment, computers, furniture, and specialist items owned by the charity and stored within your premises. Specific coverage depends on the terms of the policy.

Fundraising accident

Public liability insurance covers the costs of claims and legal expenses when a member of the public is injured or their property is damaged due to the charity's activities. For instance, at a fundraising event, a volunteer may clean up a spilt drink but forget to display a warning sign. If a guest is injured slipping on the wet floor, you could be held liable. Public liability insurance can help with your legal defence costs and compensation awards.

Insurance for charities: FAQs

Do volunteers count as employees for employers’ liability insurance? 

For insurance purposes, volunteers are typically treated as employees. Many employers’ liability policies cover volunteers, offering protection if they are injured or become ill while carrying out charity work. 

Does charity insurance cover overseas projects or volunteers abroad? 

Standard UK insurance policies may automatically extend certain elements of cover to include claims arising from incidents occurring overseas. Charities that operate internationally or send volunteers abroad may also need separate travel, personal accident, or kidnap and ransom insurance, particularly if they are travelling to hazardous territories. For example, travel insurance can include cover for medical treatment, emergency evacuation, and liability related to activities outside the UK. 

Do charities need employers’ liability insurance? 

Employers’ liability insurance is typically legally required for charities with volunteers or paid staff.3 All employers must have at least £5 million in coverage for injuries or illnesses acquired by employees while carrying out their duties. 

Do charities need public liability insurance? 

Public liability insurance isn’t legally required, but it can be useful for charities that work with the public, host events, or use third-party venues.4 Some venues may also require proof of public liability insurance before allowing access. 

What is charity event insurance? 

Charity event insurance refers to a range of cover types, including public liability insurance, for events that are being held on behalf of your charity. These cover a variety of potential risks such as event cancellation, liability for injuries or accidents, and loss or damage to property. 

Do charities need trustees and individual liability insurance? 

While not required by law, trustees and individual liability insurance is commonly used to protect the charity’s individual trustees.5 

Trustees can be held personally responsible for their decisions and problems with regulators. They might face claims if they make poor financial decisions, act carelessly, or fail in their duties. Trustees and individual liability insurance can help cover legal defence costs and compensation awards when trustees face these types of claims. 

Can small charities with fewer than 10 staff get cover? 

Insurance is available for charities of all sizes. The exact cover depends on what a charity does, where they do it, and the risks involved.

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Related guides & FAQs

Why trustees and individual liability insurance matters

Trustees and individual liability insurance can be important because, under UK law, trustees and senior managers can be held personally liable for decisions made in their role. Trustees and individual liability insurance provides personal protection for those taking on governance responsibilities.

What’s the difference between a charity and a non-profit?

The difference between a charity and a non-profit is that a charity is a specific type of non-profit organisation. While all charities are non-profits, not all non-profits are registered charities.

To be a charity, an organisation must be set up for charitable purposes recognised by law and registered with the Charity Commission.

Cyber threats: What charities need to know

Charities are increasingly at risk from cybercrime, including data breaches and ransomware.6 Cyber and data insurance can help cover the cost of data recovery, legal fees, and regulatory penalties if a cyber incident occurs.

Other FAQs to consider

What is public liability insurance?

Although similar, public liability and employers’ liability offer different types of cover for different situations. Public liability insurance covers claims from members of the public or third parties for injury or property damage. Employers’ liability insurance covers claims from employees or volunteers for work-related injuries or illnesses.

How much does employers’ liability insurance cost?

The cost varies depending on several factors, including the charity’s wage roll, number of volunteers, type of activities, and claims history. Insurers calculate premiums based on how much risk is associated with the charity’s operations.

What is charities’ insurance?

Charities’ insurance is a general term for a range of policies designed to protect charities and non-profit organisations from financial loss. This often includes public liability, employers’ liability, contents insurance, and sometimes trustees and individual liability – depending on the charity’s or non-profit organisation’s needs.

What is an SQL injection attack?

An SQL injection attack occurs when malicious code is inserted into a website's database query, potentially exposing private data. Charities that store donor or user information may face these risks and often consider cyber and data insurance to help mitigate them.

What does cyber liability insurance cover?

Cyber liability insurance typically covers costs arising from cyber incidents, such as data breaches. This can include legal fees, notification costs, credit monitoring for affected individuals, and regulatory fines. Cover varies by policy.

Disclaimer:

Our FAQ pages provide general information and background around the topic covered. FAQ pages are reviewed and monitored periodically by our insurance experts. But the content is not intended to be read as advice and any material is for general information purposes only. If you would like advice for any content, please seek professional assistance.