Charity Insurance | Quotes, Costs, Requirements

Whilst specialist products for charities exist, it’s likely that packages of multiple insurance policies will be required to fully cover any single charity. The following information should help any charity to determine what products are available, what those products do, and how relevant those policies are to their risks.

Tables of Contents

• What is Charity Insurance?
• Does a Charity Need Insurance?
• What Insurance Policies are Available to Charities?
  • Charity Public Liability Insurance
  • Charity Employers’ Liability Insurance
  • Professional Indemnity Insurance
  • Cyber Liability Insurance
  • Property Insurance
  • Personal Accident Insurance
• Where to get Charity Insurance
• How Much Does Charity Insurance Cost?
• What Level of Insurance Should Charities Buy?
• What to look for in a Charity Insurance Policy

What is Charity Insurance?

Charity insurance is a broad term applied to a range of policies, packages, and other products targeted at or suitable for charities and/or non-profit organisations. Charities tend to need specialised policies due to their organisational differences when compared to limited companies or sole traders, although there are several areas where standard insurance policies will cover any sort of business.

Does a Charity Need Insurance?

The only policy a charity is required to have by law for a charity is Employers’ Liability, however purchasing the appropriate insurance policies is often part of a trustee’s duty to protect charity assets. In that case trustees will need to obtain appropriate insurance policies for the risks the charity is exposed to, or risk being sued by stakeholders for negligence.

What Insurance Policies are Available to Charities?

Charities can typically purchase policies to cover the same risks as any other business except for Trustee Liability insurance, which is a policy intended specifically to protect charities. For example, if a charity has physical assets then insurers can generally provide coverage under a property insurance policy so long as the wording doesn’t specifically exclude charities.

What is Trustee Liability Insurance

• Do Charities Need Trustee Liability Insurance?
• What Level of Trustee Liability Insurance Should Charities Buy?
• Should Charity Directors be Covered by Directors and Officers Insurance?

Trustee Liability Insurance is coverage for anyone who makes decisions on behalf of a charity. This could be a director, committee member, or officer whose mistake could harm someone or result in a financial loss for the charity or its stakeholders.

Trustee Liability insurance also covers a range of other allegations including (but not limited to) defamation, negligent operation of pension or employee benefit schemes, any health and safety regulation breaches, and employment disputes.

Do Charities Need Trustee Liability Insurance?

There is no legal requirement for charities to purchase this cover, however almost every single charity in operation today has risks or exposures which a Trustee Liability policy could protect against. A responsible trustee should seriously consider Trustee Liability insurance.

What Level of Trustee Liability Insurance Should Charities Buy?

Charities by nature often provide services or funding to disadvantaged, underrepresented, or vulnerable individuals or groups. As is unfortunately the case this means that charities themselves can be at risk of significant claims should mistakes be made which result in harm or financial loss to these stakeholders.

You should look to purchase the highest affordable level of coverage available unless you have been advised otherwise by a qualified, regulated insurance representative such as a broker or insurance company employee. Even in those cases you should retain a written record of advice given in case claims or losses ever exceed your coverage level.

Should Charity Directors be Covered by Directors and Officers Insurance?

Typically Trustees Liability insurance provides the same covers as Directors and Officers insurance policies, with Trustees Liability tailored to those running a charity rather than a for-profit business. If insurers offer a Directors and Officers quotation rather than a Trustee Liability quotation, make sure you understand why this is and don’t be afraid to seek a second opinion from another broker or insurer.

What is Charity Public Liability Insurance?

• Do Charities Need Public Liability Insurance?
• Do Charities Need Products Liability Insurance?
• Do I Need Public Liability Insurance for a Charity Event?

Charity Public Liability insurance is often the same as business Public Liabilityinsurance policies in that it protects members of the public if they are injured by the actions of your charity or business representatives. Check policy wordings to ensure that volunteers and students are covered when acting on behalf of the charity.

Do Charities Need Public Liability Insurance?

Public Liability insurance is not a legal requirement for charities, however given that charities often interact with the public, host events, and may also interact with vulnerable people, a responsible charity should ensure that they have appropriate Public Liability insurance in place.

If a charity directly cares for vulnerable or at-risk people then any Public Liability policy will likely require amendment or additional underwriting from insurers. If this applies to your charity or you have any doubts as to the suitability of a Public Liability quotation, contact insurers or brokers directly and ask them to confirm policy suitability in writing.

Do Charities Need Products Liability Insurance?

If a charity directly or indirectly manufactures, provides, or sells physical products then a products liability amendment/inclusion on any public liability policy will protect the charity against claims that those products have caused illness or injury to any member of the public. Again, if in doubt this is something you should discuss with an insurer or broker directly.

Do I Need Public Liability Insurance for a Charity Event?

In short, yes. Whilst venues, entertainers, and caterers will often have Public Liability policies it is still possible that charity representatives, charity assets or equipment, or specific events might result in injury to members of the public or other people present at the event. This may not be covered fully by a standard Public Liability policy.

Events Insurance is typically available on a per-day basis and will cover claims which fall outside of other entertainers’ or venue’s Public Liability policies, and will often include extra covers such as for event cancellation or equipment damage, which won’t be covered on a standard Public Liability policy.

What is Charity Employers’ Liability Insurance?

• Do Charities Need Employers’ Liability Insurance?
• Do Charities Need Insurance for Volunteers and Students?
• Are Volunteers and Students Covered by my Charity Insurance Policy?

Charity Employers’ Liability insurance is usually a standard business Employers’ Liability insurance, although it should be made clear to insurers from the quote stage that the policy is for a charity. Insurers will likely then ask additional questions relating to volunteer activity and events hosted/attended to ensure they can provide the right coverage.

Do Charities Need Employers’ Liability Insurance?

Yes, as with any other organisation with employees this is a legal requirement. Even if a charity doesn’t pay any wages a volunteer is legally classed as an employee and can still claim against the charity for injuries sustained as a result of the work that they do. This includes claims for improper training, insufficient safety equipment, or improper supervision.

Do Charities Need Insurance for Volunteers and Students?

Yes, volunteers, students, apprentices and anyone else working on behalf of or representing a charity can claim on an Employers’ Liability policy if their work results in their injury or illness. As representatives of the charity their actions can also result in Public Liability or Professional Indemnity claims, depending on their activities.

Are Volunteers and Students Covered by my Charity Insurance Policy?

You should contact your insurer and ask if volunteers or students are covered under your policies, and ensure that you have the correct policies for the activities those volunteers are carrying out. Public Liability may provide cover for a volunteer’s presence, but if the volunteer is providing professional advice on behalf of the charity it will likely be necessary to ensure the right Professional Indemnity coverage is also in place in the event of claims for negligent advice.

What is Charity Professional Indemnity Insurance?

• Do Charities Need Professional Indemnity Insurance?
• Should Charity Directors Take Out Professional Indemnity Insurance?

Charity Professional Indemnity insurance is no different from regular Professional Indemnity insurance in that it protects anyone providing professional advice or services from allegations of negligence.

Do Charities Need Professional Indemnity Insurance?

If a charity provides any advice or professional services then it will likely need Professional Indemnity insurance if a mistake is made or negligent advice is given.

Even charities that have professional services ‘donated’ by qualified third parties should discuss their Professional Indemnity risks with an insurance company or broker, as beneficiaries may still claim against charities for negligently recommending the services of a particular professional, or for acting as a ‘go between’ or provider of professional services, even where the charity itself has no professional qualification.

Should Charity Directors Take Out Professional Indemnity Insurance?

If charity directors are professionally qualified or have experience which makes them an expert or authority in any area, then they have a duty of care to those they advise to ensure that their advice is correct and not negligent. In that case, they should always consider a Professional Indemnity policy as they could be claimed against, even for freely given services.

What is Charity Cyber Liability Insurance

• Do Charities Need Cyber Liability Insurance?

Charity Cyber Liability insurance protects against a range of losses incurred through your computer systems being compromised, such as from ransomware attacks or other forms of hacking.

Whilst a typical Cyber Liability insurance policy is suitable for businesses and charities alike, charities may find these policies more beneficial as insurers often provide security consultations or education programs alongside their policies which can help prevent losses outright.

Do Charities Need Cyber Liability Insurance

Any business with computerised systems can benefit from Cyber Liability insurance, however in the case of charities, a hack or systems interruption can also negatively impact the beneficiaries of the charity. A Cyber Liability policy ensures that interruptions are minimised and important funds are fully protected.

Do Charities Need Property Insurance?

If charities own buildings or any amount of other physical property, then although they are not required to insure them by law having them covered ensures that they are replaced as quickly as possible if damaged or stolen. Like many of the more general policies, there is no charity-specific property policy and suitable policies will be selected by insurers or brokers depending on the property to protect.

Do Charities Need Personal Accident Insurance?

Personal Accident insurance coverage can help keep things running if a critical person is injured, so for charities this may be considered a necessary policy to have, depending on the size of the charity or the importance of the individual. These policies can pay a cash amount in the event of an injury, and can be purchased for individuals or groups of trustees.

Where to get Charity Insurance

• Charity Insurance Companies
• Charity Insurance Brokers

Depending on the complexity of the charity a direct insurer or broker may be the best choice. Insurers are likely to have competitively priced insurance packages for small to medium charities, whereas brokers will explore a variety of insurers to put together a bespoke package for medium to large charities.

Charity Insurance Companies

Many insurers have their own in-house charities policies and packages. If you know what you are looking for then an all-in-one policy package gives you the advantage of dealing directly with the company responsible for the policy wordings. This can help eliminate gaps between covers, but be sure to ask for information on specific exclusions and conditions, and don’t be afraid to shop around.

Companies such as Hiscox and Zurichare good places to start, but you can also compare the market with our partner QuoteZone's tool here.

Charity Insurance Brokers

Charity specialist brokers such as Ecclesiastical will have deals with a range of insurers which they can use to produce a bespoke package for charities of almost any size and complexity.

The benefit of brokers is that you can buy from an expert in charity insurance, although the downside is that brokers typically charge a fee or take a commission, so you may not be getting the absolute lowest premium available.

What's the Average Cost of Charity Insurance?

This is hugely dependant on the size of the charity, the level of cover selected, and the risk level of activities. Policies can start from under £100 and with a large charity can rise to tens of thousands of pounds annually. The most important thing is to ensure that the main risks that the charity is exposed to are adequately covered.

What Level of Insurance Should Charities Buy?

Ideally a charity should look to obtain the highest possible available coverage within a reasonable budget. For some context this can be between 0.5% and 5% of the annual income of the charity, again depending on the sectors and risks the charity is exposed to.

Brokers have some advantage over direct insurers in providing advice, as they suggest appropriate levels of cover for their clients (and be held accountable if they are mistaken). Insurers are typically unable to advise on appropriate cover level since they sell the product directly and this may bias their opinion.

What to look for in a Charity Insurance Policy

The most important thing to look for in a charity insurance policy is whether the insurer or broker responsible fully understands the activities and risks that the charity is exposed to. If you feel that you have discussed the needs of the charity fully and that your insurer or broker has shown that they understand your activities, it is likely that your policy will be appropriate.

As with all quotations and policies, there is nothing wrong with shopping around and asking insurers to explain what makes their policy more suitable for your needs. Remember to keep a record of email and telephone conversations and to ask for confirmation of any ambiguous cover terms in writing and you will end up with a solid policy.