What to consider when buying insurance for small charities
06/19/2022
As a trustee of a small charity, one of your duties is to protect your charity and its assets and resources. Buying insurance is one of the ways that you can help fulfil this responsibility. This article answers some frequently asked questions about arranging insurance for small charities. The government website also provides helpful guidance.
What should I consider before buying your insurance?
It's important to make sure that the person that takes responsibility for arranging your insurance has a really good understanding of how you operate and what services you provide. This will enable the insurer and your organisation to work together to ensure all of your organisation’s activities and assets are covered.
During the process of getting a quote, you may also be asked questions about your organisation such as your wage roll numbers if you have paid staff, or the number of hours your volunteers help during an average week.
If you work closely with children or adults at risk, you may also be asked about your safeguarding policies and procedures.
Finally, it's important to consider what levels of cover your organisation might require. For example, if you need to cover a building, your insurer may want to know the cost of rebuilding your property, or you may do a lot of fundraising events and you’ll need to know how many events you run each year, how many people attend and much cover you need for money that is being handled during the events.
Do I need to be a registered charity to buy insurance?
At Zurich, you don’t need to be a registered charity to buy insurance. We can provide cover for not-for-profits such as registered charities, unregistered charities, CIC’s, CIO’s and clubs or societies. All insurers have different requirements, so it's important to check that any insurance you buy is suitable for your type of organisation.
What are our legal obligations for charity insurance?
There are two types of insurance cover that you may be legally required to purchase. If you have paid staff, you're required to have a minimum of £5 million Employers' Liability insurance. Motor insurance is also a legal requirement, if your organisation owns or leases a motor vehicle.
Does my charity need Public Liability cover?
In most cases, the answer is probably yes, if you interact with the public in any way. Public Liability insurance helps protect your organisation if you are responsible for accidentally damaging someone’s property or accidentally injuring someone such as a volunteer, service user or member of the public. Cover also includes legal costs in defending the claim. At Zurich, we cover volunteers under our Public Liability cover but every insurer is different, and some may class volunteers as employees, so it's important to check with your provider.
You can watch videos and learn more about this cover on our Public Liability insurance page.
What other covers do I need to consider?
When buying insurance, you’ll need to consider the type of charity you are, what activities you run and what assets you have. This will help inform what different types of cover you need. To help establish what cover you need, it might be helpful to consider some of the following questions:
- Do you have volunteers or interact with the public?
- Do you have trustees that need indemnity protection?
- Do you have employees?
- Do you own or use motor vehicles?
- Do you have buildings that you own or are responsible for?
- Could your organisation continue to run if your buildings were damaged?
- What contents do you need to insure?
- Are you responsible for a premises that you hire out?
- Do you handle money?
- Is it possible you might need legal help?
- Do you give advice?
- Do any of your volunteers travel outside of the UK?
- Could you be held responsible for libel or slander?
Our website provides details of the different types of cover available and our 10 questions to make buying insurance simple document is a useful guide to the different types of insurance you could consider.
Why do some insurers ask for risk assessments to be completed?
Insurance companies may ask if your organisation completes risk assessments. A risk assessment helps to demonstrate that you’ve identified the risks that your organisation faces, and that you've put appropriate measures in place to help manage the risks.
Having a risk assessment in place, and documented, is important as it creates awareness of the risks and hazards your organisation faces, reducing the likelihood of damage, injury or reputation damage. It also provides crucial evidence in defending a claim. If you need some help, you can watch our short video for a guide to risk assessments for not-for-profits.
For more information about our insurance for not-for-profit organisations, visit zurich.co.uk/charity.
