What insurance does a small charity need?
_ Policy Bee _
The Charity Commission reports that there are nearly 170,000 main charities and over 15,000 linked charities registered in England and Wales. That’s a lot of people who want to help others. But what happens when something goes awry?
The Government website gives six steps to setting up a charity, from choosing a name to detailing your overall aim. Here is another list of six. Six insurances that might be a good idea for every charity.
Charity public liability
This one is essential if your charity interacts with people – anywhere. It doesn’t matter if you organise a single coffee morning or multiple fundraising events. Accidents can happen. An injury on a bouncy castle, or tripping over the urn’s electric cable. Any unforeseen events, and you need to be covered. Public liability (PL) insurance doesn’t just cover those types of accidents either. Property damage is also sorted – so when someone accidentally knocks over a photographer’s tripod breaking their very expensive camera, your PL has you covered. Smashing!
If someone gets injured and claims it’s your fault, or their property was damaged, public liability insurance can help. It pays for your legal costs and defence, as well as covering any compensation you might owe. That could save you, and your charity, thousands.
Trust in your trustee insurance
“Ignorance is no defence in law.” How many times have we heard that, or a variation of it? According to the Charity Commission, there are over 944,000 trustees in England and Wales alone.
All trustees have a responsibility to their charity. And all are personally liable for the consequences of the decisions they make on the charity’s behalf. Unfortunately, evidence suggests that not everyone knows what’s involved.
Anything from misuse of finances to failing to pursue your stated aims, and much like a business, the people at the top are accountable. Trustees’ liability insurance pays for a legal expert to represent you and covers costs, as well as picking up the tab for any compensation in civil cases.
Employee liability insurance
It’s the law. No, really, it is. If you employ people the Health and Safety Executive (HSE) will fine you for not having employee liability (EL) insurance. Up to £2,500 for each day you were meant to have it but didn’t.
Scare tactics over.
As a caring, compassionate employer, you want to take care of the people who work for you. But what happens if an employee falls down the stairs and can’t work, or they have an allergic reaction to the office cat? If they claim that you are in the wrong, and it’s your fault, EL will cover your legal costs and any compensation.
And it doesn’t matter if they are full-time, part-time, temporary, work experience or even a volunteer, you have a duty of care. Just because someone is unpaid, they can still claim against you by alleging your negligence harmed them.
Contents and equipment
Think home contents insurance, but for your charity. If you own premises or rely on kit, then it needs to have its own insurance. Imagine the chaos if the office computer got stolen or the youth centre floods, ruining fixtures and fittings. Your cover pays either for repairs or to replace items as new. You can also get portables insurance to protect, well, the portable things, like laptops and phones.
Professional does not mean suited and booted. It means you know your stuff and you present yourself as an expert. But things can go wrong, everyone makes mistakes.
Perhaps you specialise in translating, but a helper gives the wrong advice meaning a form is not correctly filled in. Maybe you said something on social media that someone took as advice and lost out financially.
There are lots of things that could go wrong, in scenarios that we hope won’t happen. But mistakes are made and charity professional indemnity insurance steps in to help. It pays for legal defence and covers any compensation if necessary. And it does all that whether the allegation is valid or not.
The government website helpfully sets out “what charities and their trustees need to consider when fundraising from the public”. You can read more here: Charities and Fundraising. Pre pandemic, events were a crucial part of the fundraising mix. Think cake sale, summer fete or fun run, and you also need to think “Charity Fundraising Event Insurance”. Public liability can cover your event, but check the wording carefully to make sure the right bits are included.
Is that it?
Not quite. Other insurances that trustees might want to think about include:
· Cyber insurance
· Legal expenses insurance
· Loss of revenue insurance
· Personal Accident cover and/or health insurance
· Buildings insurance (if you have a building)
And if your charity owns a vehicle, motor insurance is a must. You can contact The British Insurance Brokers' Association for advice - www.biba.org.uk.
If you do have any questions about insurance for charities, or want a helping hand for where to start, feel free to give the PolicyBee team a call on 0345 222 5370. Or you can see their website policybee.co.uk/fsi for more information.