What types of insurance do charities need?

Q: Do charities need employers’ liability insurance?

Under UK law, organisations which employ staff need employers’ liability cover in most cases – including charities.

A charity is a unique kind of organisation whose aims go beyond profit. As a charity leader, you know philanthropic services are vital to the communities you serve or causes you support.

Still, the financial side of things is important – as is your reputation. As such, business insurance can play a key role in protecting a charity and the income it needs to generate.

If plans for a fundraising event are put on hold when a printer breaks down, then charities’ equipment insurance can cover replacement costs – so your flyers still reach the right hands. If someone takes your charity to court, then business insurance can be instrumental in funding the defence against the claim.

Some types of cover may be essential – employers’ liability insurance, for example, can be a legal requirement for a charity with staff. Other types of insurance safeguard a charity’s finances by insuring property, indemnity or liability risks.

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Why do charities need insurance?

A fundraising fall

While you’ve been busy entertaining donors at the annual gala, a drink was mopped up without a sign being put out, resulting in a guest slipping and becoming injured.

It’s not a scenario any charity likes to imagine, but thanks to your public liability insurance, the ensuing legal case is accounted for financially. Cover can also help put things right by paying compensation.

An injured volunteer

A box of heavy items takes a tumble, injuring one of your charity shop volunteers in the process. The affected individual needs to take time off from their day job to recover, which brings a cost to the volunteer via loss of earnings.

If a charity staff member takes you to court over injury or illness, then employers’ liability insurance can provide up to £10 million in legal fees, plus help with compensation.

A data breach

To help communities effectively, your charity stores sensitive information. This helps you reach people quickly and track funds – but it also means names, addresses, health data and financial records could be vulnerable in the event of a breach.

Even if data is stored correctly, criminals can still target a charity and its digital assets. A volunteer could also cause accidental data loss by misplacing a charity laptop during their commute. Cyber and data insurance helps to minimise the financial and reputational fall-out from such events.

Insurance for charities: FAQs

Do charities need employers’ liability insurance?

Under UK law (external link), organisations which employ staff need employers’ liability cover in most cases – including charities. This rule applies for full-time charity staff and casual volunteers alike.

Voluntary work may be done in good faith, but anyone who helps out may face risks from activities such as laptop use, which can cause repetitive strain injury (RSI), or environmental hazards during a beach clean.

Do charities need public liability insurance?

Charities have similar liabilities to limited companies. This means a charity can face legal action if someone gets injured on their premises or property gets damaged due to work carried out by the charity.

Charity event insurance is a popular short-term option which combines cover for common risks. If an educational visit leads to venue damage or a student injury, this cover can assist with any related costs.

Do charities need trustees’ insurance?

Trustees are often in the public eye, leaving them exposed to heightened scrutiny. If serious claims about your charity begin to circulate, then breach of duty claims may be levelled against them.

Trustees’ insurance is designed to cover related legal costs, so it’s a key cover for trust-structured charities.

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What is public liability insurance?

Public liability insurance can protect charities from unforeseen costs following an accident or event. Read our full guide to learn how and when a policy can help.

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

When it comes to business insurance, your organisation’s status – as a charity or non-profit – matters. Read our article to understand the difference.

What is a phishing attack?

Organisations of all types can face threats from malicious links. Learn the definition of phishing and how to protect your charity with our FAQ guide.

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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.