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Do charities need professional indemnity insurance?

02/12/2020

Professional indemnity insurance for charities helps protect your charity if it's sued for bad service or poor advice

Being professional is as important to charities as it is to businesses.

That doesn't necessarily mean wearing a snappy outfit and looking the part. It's more about an attitude – an attitude towards doing things properly and ticking all the boxes.

So it's good news that professional indemnity insurance for charities does a great box-ticking job. Especially if your charity gives advice or provides professional services.

That's because we're all capable of making mistakes. The difference is, if your charity makes a mistake or fails to do something it said it would, it could lead to the organisation you're working with suffering a financial loss. If that happens, there's nothing stopping that organisation claiming against you for their losses.

Professional indemnity insurance for charities helps by paying to defend you and by covering any compensation you're liable for.

When can professional indemnity insurance for charities help?

Say you help people with reading difficulties fill in complicated forms. But a helper gives incorrect advice, meaning a form is completed wrongly and an application for Universal Credit is rejected.

Or maybe you accidentally breach a client or clients' confidentiality simply by leaving a data-packed USB stick on a train...where it falls into the wrong hands.

The reality is, we live in an increasingly litigious society where people are encouraged to take legal action in a quest for compensation. And the fact you're a charity won't protect you from being on the receiving end of claims made by the very people you're trying to help.

Net losses

It doesn't stop there, either. That's because most charities are online in some shape or form, whether that's through a dedicated website or a Facebook page.

Much of what's written on those pages can be construed as 'advice'. If someone takes that advice and their organisation suffers financially because of it, they can claim against your charity for their losses.

The bigger problem with this, however, is that it doesn't always matter if you haven't actually done something wrong. A claim can be made whether it's justified or not and you'll have to deal with it regardless - if for no other reason than it won't go away if you ignore it.

Your professional indemnity insurance for charities helps by paying for a legal expert to advise your charity and fight your corner in court. Also by covering any damages you're liable for if it turns out you are at fault.

Digital dilemmas

Defamation and slander are covered under your policy too, which is especially important in our digital age.

For instance, professional indemnity will help protect your charity if one of your members posts a derogatory tweet about a local celebrity who was supposed to help out at an event but failed to show up. And that celeb sees the tweet and decides to sue.

And don't forget that with charities increasingly providing services under contract, particularly to local authorities, professional indemnity insurance for charities becomes even more important.

Aside from the protection it gives you, it's another sign of that 'professionalism' we're talking about – it says you take what you do seriously. Clients want that reassurance and are increasingly making having a certain level of professional indemnity a contract condition. Some won't even consider your tender without it.

How professional indemnity insurance for charities is your friend

The good thing about professional indemnity insurance is that it helps give your charity a professional edge, without changing its friendly face.

If and when things go wrong, it works in the background, using the might of an insurer and the legal expertise it has at its disposal to protect your finances and your reputation. Most importantly of all, it keeps funds flowing in the direction they're most needed.

To find out more about professional indemnity insurance for charities, click here. Or ring the team on 0345 222 5391, and they'll be happy to answer your questions.

And if you'd like to read about what other insurance your charity might need, it's all explained in our simple guide.

Image used under license from Shutterstock.

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