What does coronavirus mean for charity insurance?
PolicyBee – Small Charities Week
The coronavirus outbreak has had a major impact on all of our lives, but the effect it has had on vulnerable people – such as the homeless, survivors of domestic violence and the elderly – has been catastrophic.
What’s worse is that the usual lifelines for those people – chiefly provided by the charity sector – has been in turmoil since lockdown began.
Donations have dried up, volunteers are being directed to other frontline services and those who deliver help to millions across the UK have had to adapt to doing things in a completely different way – often struggling to reach those who need them most.
It can be hard in such a desperate situation to think about anything other than keeping your head above water.
But to do that effectively, you have to look at your insurance policies to make sure that you still need the protection your existing policies offer and whether you also need to cover new risks too.
Do I still need all my existing policies?
Charity trustees have a duty to protect their charity’s assets and resources.
All charities face risks, and insurance can be an appropriate way of protecting them against any loss, damage or liability arising from these risks. But surely, if you are in lockdown – and prevented from working – you don’t need certain policies in place, right?
Wrong, I’m afraid.
Let’s first consider professional indemnity (PI) insurance. You might think that if you’re not doing any work, you can’t make mistakes.
Well, you can’t make any new mistakes, no. But that won’t stop people bringing claims against you for mistakes you made in the past, before the current crisis.
For your policy to do what it’s designed to do, it needs to be up and running when the work in question was done and when a claim is made. If you’ve stopped your cover in between, it can’t help you.
What about employers’ liability (EL) insurance, then? If your staff aren’t working, do you still need it?
Absolutely. In fact, it’s the law. Your EL goes on doing the same job for you whether your employees – or volunteers – are working at your usual premises or working from home.
It doesn’t matter if you’ve furloughed staff either. They remain your employees and they could still make a claim against you based on something that happened before anyone even knew what ‘furlough’ means. So, you still need your EL.
Protecting yourself too
With a likelihood of redundancies, changes to the workplace and the need to adapt comes the increased possibility that, as a charity trustee, you’ll be sued.
You personally, that is.
It might surprise you to realise that trustees of even very small charities bear considerable responsibility both for their actions and the actions of the organisation they represent.
And, if a claim is made against a trustee, they would be personally liable to pay the legal costs of the claim and any investigations.
Charity Trustees Indemnity insurance would cover this cost to protect you and the charity as a whole.
It’s probably more relevant at this time of shifting sands than ever before. You can add on employment practices liability insurance to cover any disputes with staff.
What other risks?
With so many people remote working from home, often with sub-standard security, hackers are reaping the rewards.
Currently the internet is awash with fake websites promising essential coronavirus information but instead delivering malware onto your network. Scam emails and phishing attacks are also rife, carrying with them the very real threat of significant data breaches.
There’s advice on what to look out for and how to ramp up your security here. But now more than ever may be a good time to invest in cyber insurance.
Although it can’t stop the hackers getting onto your system, it provides a rapid structured response and helps get your charity back up on its feet again quickly.
Right now you are likely to feel very overwhelmed with adapting to the new normal and establishing different ways of working and the last thing we want to do is add to that burden.
However, as we struggle to get through this difficult period, we need to think ahead and one of the best ways to plan for the future is to mitigate the risks.
If you’d like to talk about any aspect of your charity insurance, you can call PolicyBee on 0345 222 5381. Or visit their website here: www.policybee.co.uk/FSI