Why do charities need insurance?
Working to improve others’ lives is noble.
But doing so makes you vulnerable to risks and liabilities you might not be aware of.
Seems a bit unfair doesn't it?
Problem is, charities of all sizes are subject to the same level of scrutiny and bureaucracy as commercial businesses.
And just like company directors and their businesses, trustees are responsible for all aspects of their charity: from counting the pennies to keeping up with health and safety; from volunteers’ welfare to the charity’s public face.
But wouldn’t it be a shame if red tape and risk got in the way of your good cause? Well, don’t worry, it needn’t. You can do something about it.
That something is insurance for small charities.
Here’s how it helps.
Cover for your trustees
When you take responsibility for running a charity, you really take responsibility for it.
You are, by definition, trusted to take care of everything. That includes obvious things like overseeing fundraising and donations, of course, but it also extends to your charity’s activities, its people, its compliance with relevant laws, its marketing and so on.
Easier said than done, perhaps. Any one of these things – and many more – can spell trouble.
Expensive trouble too. Did you know, as a trustee, you’re personally liable for your decisions? The buck stops with you and allegations that your charity’s done something wrong are, unfortunately, your problem. And because they’re your problem, you’ll have to spend your money defending yourself.
If there’s a claim against you, trustees’ insurance helps by doing the legal legwork, paying your legal bills and safeguarding your reputation. More importantly, though, its protection means you can keep doing what you do best: running your charity.
You’re covered for:
- Your personal liability as a trustee
- Actual or alleged ‘wrongful acts’, including breach of trust, defamation and negligence
- Legal defence costs and any damages you have to pay
Cover for your volunteers
It’s likely that your charity needs an extra pair of hands now and then.
Maybe it’s someone to dish out the biscuits at a coffee morning. Or perhaps it’s an assistant bucket-shaker or two at a fun-run.
Nothing wrong with that is there? Well, possibly, yes there is.
If a volunteer gets injured or ill while helping you, and it’s your charity’s fault, you’re liable. If they sue for damages, you’re liable for their compensation too.
This is because the Health and Safety Executive classes volunteers as employees. Even if they’re unpaid, temporary, part-time, or simply helping out. And because they’re classed as employees, their health, safety and welfare is your legal responsibility.
To the average small charity that’s an unwanted responsibility – but it doesn’t mean it’s an unmanageable one. The answer is employers’ liability insurance and every UK charity with employees (and volunteers) has to have it.
There’s one more detail: it’s compulsory, so trying a shortcut here isn’t a great idea. You could face a £2,500 fine for every day you don’t have the insurance when you should.
You’re covered for:
- Bodily injury claims against your charity by its employees, volunteers, and helpers
- Defence costs for further criminal prosecutions against you following a claim
- Court attendance as a witness in connection to an employee’s or volunteer’s claim
Cover for your events
Successful fundraising depends on people. Lots of people in one place, ideally.
But lots of people in one place usually means events.
And events are a bit of a minefield.
The last thing you need is someone getting hurt at your fete, quiz night or sponsored walk and blaming it on you. You can do all the risk assessments in the world but that doesn’t always stop slips and trips.
It’s a sad fact that compensation culture trumps philanthropy and someone nursing an accidentally broken ankle (or laptop for that matter), will want someone to pay for it. If the accident happened at your event, on your premises, or because of someone from your charity, it won’t be long before fingers point at you.
Public liability insurance helps. It pays your legal bills and any compensation you’re liable for if a third party makes a property damage and personal injury claim against you and your charity.
You’re covered for:
- Third-party bodily injury or property damage claims against your organisation
- Fundraising events such as: fetes, craft fairs, walks, dinners, car cleaning, fun days
- Replacing third-party keys, locks and pass cards lost while in your legal care
Cover for your property
Investing hard-won donations in equipment and other bits and pieces to keep your small charity functioning is, of course, absolutely necessary.
Having it stolen, broken, burned, soaked, or otherwise ruined or lost, however, has the potential to cause all sorts of problems.
Aside from the obvious expense of replacing or fixing what’s missing or broken, you’ll be wrestling with the inconvenience factor. You might find you can’t continue offering the level of support you need to. Or you might have to postpone events, potentially reducing the amount of donations you’ll get.
With all this in mind, it seems reasonable to protect what keeps you up and running. You can’t always prevent accidents but you can make sure their consequences don’t scupper your good cause.
Contents and equipment insurance covers all your charity’s assets, from tables and chairs to computers and other equipment. It can also include the things you take out and about (like a laptop). What’s more, this particular policy is ‘all risks’ which, as the name suggests, means your property is covered in all reasonable circumstances (theft, fire, flood, accidents).
You’re covered for:
- Loss, theft or accidental damage of your charity’s property
- Damage caused by fire, flood, storm or operator error
- Theft or loss of money held on behalf of your charity
Cover for your expertise
Depending on what your charity does and who it supports, you could be asked for professional advice from time to time. You might offer it as a paid-for service – for example, counselling or giving pointers to business startups.
Nothing wrong with that, of course. Extra income is always welcome.
The problem is, by offering advice you’re opening the door to negligence claims against your charity. That’s because, as an expert, you have a legal and moral duty of care to do your best work.
Breaching that duty of care usually ends in allegations you’ve cost your clients money by giving the wrong advice, making a mistake, or not doing what was asked. That’s usually followed by an expensive-looking compensation claim.
Not really in the charitable spirit is it?
Possibly not. But it happens. And if it happens to you, you’ll need professional indemnity insurance for charities.
Even if you think a claim or an allegation against you isn’t justified, you have to do something about it. Unfortunately, claims don’t just go away, and your reputation can’t risk the possible fallout.
If someone does accuse your charity – rightly or wrongly – of financially damaging their business, your policy helps. You get the legal know-how of specialist solicitors to fight your corner, the deep pockets of an international insurer to pay compensation, and the guiding hand of an insurance expert to smooth things over.
You’re covered for:
- Financial losses caused by your mistakes and things you’ve failed to do
- The costs of replacing or restoring lost or damaged data you need to run your charity
- Failing to keep donors’ confidential information safe and sound
Why should I buy my insurance from you?
Glad you asked.
The simple answer is: we know what we're doing. Professional insurance is all we do so we know what you need, even if you don't.
We also know that buying insurance can be, well, a bit of a pain. So we make sure getting yours is quick and hassle-free.
We do all that while treating you like a human being, too. You won't find a call centre here. Or a phone menu. And we've banned nonsense insurance jargon.
Anything else? Well, there's the great stuff you get, such as 20% off everything at MOO. We have an 'I'm insured!' badge for your website too – perfect for the professional professional.
Also, we'll give you money each time you recommend us.
Plus, every insurance-related question you can think of is answered in our School of Risk, and you'll get our quarterly risk advice email – 'The Waggle' – to help you avoid problems in the first place.
If you're after a second opinion, have a look at our customers' feedback. They're the ones you should really listen to.