Why do not-for-profit organisations need insurance?
Not-for-profit organisations encounter many of the same risks as commercial businesses but may face tighter budgets and greater public scrutiny. You may handle sensitive data, manage volunteers, organise events, and make decisions that impact your beneficiaries. Insurance can provide a financial safety net should things go wrong, helping you manage these risks so you can focus on your mission.
Stolen data
Your organisation likely handles sensitive information about donors, members, volunteers, and beneficiaries. Whether it’s personal data, financial information, or confidential records, a cyber attack or data breach can expose you to theft, fraud, or privacy violations.
Let’s say hackers access your database and steal credit card information from hundreds of donors. The resulting investigations, including notification costs and potential compensation claims, could be costly. Cyber and data insurance can help cover these expenses and provide expert support to manage the breach, protecting your organisation and the people who trust you with their data.
Volunteer injury
Volunteers are the backbone of many not-for-profit organisations and their safety is paramount. Whether setting up for a fundraising event or working in your offices, accidents can happen, no matter how careful you are.
While setting up tables for your annual charity dinner, a volunteer slips and injures their back, requiring medical treatment and time off work. Even though they’re unpaid, you could face a compensation claim. Employers’ liability insurance can help cover your legal defence costs and compensation awards.
Complaint against trustees
Your trustees make critical decisions about your organisation’s objectives, finances, and operations. They often carry great responsibility and accountability, but despite their best intentions, they can misadvise or make mistakes. If someone challenges these decisions, they could claim a breach of duty or negligence.
The right cover can protect you if you oversee a non-profit group – whether you’re a trustee, director, governor, committee member or an officer. 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, trustees and individual liability insurance can help.
What insurance is available for not-for-profit organisations?
Trustees and individual liability
If you’re a not-for-profit group, trustees and individual liability insurance can help you to deal with claims that arise if you, or a lead in your organisation, gets it wrong. A service user may accuse you of negligence or defamation, or you may face prosecution for how the organisation operates.
This cover is similar to directors’ and officers’ liability, or management liability, though specifically tailored to the not-for-profit sector. Whether the claim is justified or not, we’ll be there for you.
Cyber and data cover
Cyber and data insurance can help protect your organisation against cyber attacks and data breaches. In the event of an incident, it can help with the costs of investigating, notifying affected people, providing credit monitoring services, and managing regulatory fines or penalties.
Not-for-profit organisations that handle sensitive information about donors, volunteers, beneficiaries, and staff members can be vulnerable to cyber criminals. A data breach could result in significant financial costs and harm your organisation’s reputation. Whether it’s a sophisticated cyber attack or a simple human error, having the right insurance in place can protect you if incidents occur.
Employers’ liability
Employers' liability insurance is often a legal requirement (external link) for not-for-profit organisations and charities – even if you only hire volunteers. It can help cover compensation costs if an employee or volunteer claims they were injured or fell ill because of their work for you.
Regardless of how careful you are, things can go wrong. Even if someone is only volunteering at the weekend, if they feel you’re to blame for their accident, you could face legal action. Employers’ liability insurance can help protect you against the unexpected.
These are just some of the types of insurance for not-for-profit organisations we offer. Tell us more about what you do and we can build a policy that’s tailored to the needs of your business.
Build my coverInsurance for not-for-profit organisations: FAQs
What risks are most common for not-for-profits?
Not-for-profits can face several common risks, including:
- Cyber attacks and data breaches involving sensitive donor and beneficiary information.
- Volunteer and employee injuries during events and activities. Trustee decision-making errors that could lead to claims of negligence or breach of duty.
- Injuries to members of the public or damage to their property when interacting with the community.
- Theft of, or damage to, their own equipment.
What insurance can help if equipment is stolen from a not-for-profit organisation?
Furniture, computers, audio-visual equipment, and other property used and kept within your premises are typically classed as contents. You could be left significantly out of pocket if these items are stolen. Contents insurance can help protect you against the risk of theft, helping to minimise disruptions to your organisation.
For items that are primarily used away from your premises – such as laptops, tablets, smartphones, and other essential devices – you might need portable equipment insurance. Should these items be stolen when away from your premises, for example, at a volunteer’s home or an event, portable equipment insurance can help cover the cost of replacements.
Are safeguarding-related claims covered under trustees and individual liability insurance?
Safeguarding-related claims can be complex, and coverage may depend on your specific circumstances and policy terms. While trustees and individual liability insurance can cover trustees for wrongful acts, which could include failures in safeguarding policies or practices, given the serious nature of such issues, it’s essential to have robust policies in place and seek specific advice about your coverage.
For more information, please get in touch with our customer service team. You can reach us on:
Mon-Fri 9 am-5 pm.
Do not-for-profits need public liability insurance?
Public liability insurance isn’t a legal requirement for not-for-profits.
However, not-for-profit organisations can face similar risks to limited companies, depending on how your organisation works. If this is the case, public liability insurance could be a worthwhile investment if you frequently work with or around the public.
Various insurance types are available for not-for-profits. For example, professional indemnity insurance, cyber and data insurance, and legal protection insurance could all help you stay on track should issues arise.
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