Insurance for small charity and voluntary groups

Hello, welcome to this introduction to insurance for small charities and voluntary groups by Support Cambridgeshire, a partnership between CCVS and Hunts Forum.

This short online module will help you to consider whether your small charity or voluntary group needs insurance, the different types of cover that’s available, how you can make sure you get the cover that you need, as well as providing a summary of top tips to help you through the process.

This module is supported by guidance links (see end of this webpage).

Do you need insurance?

Sometimes there are misconceptions that the need for insurance only applies to established organisations. However, this isn’t true. It is NOT only registered charities that need to think about insurance.

If you were an unregistered charity or community group that are involved with the public in anyway, insurance should be on your agenda.

But it is worth noting that not all insurance providers offer cover to unregistered charities, so you might need to shop around.

You will need to think about insurance, even if you’re renting a room in a building that is run by another group. You may be covered by their public liability insurance, however, it’s very important to check, rather than to assume.

If you are not covered by their insurance, you will need to take out your own.

Even if you don’t have staff, you may still need insurance. It’s about keeping yourselves and the public safe.

What types of cover might you need?

What you will need will depend on the type of charity that you are, the types of activity that you run, and what assets you have.

If you are a small charity or community group, it is likely that you will need public liability insurance.

Public Liability Insurance

It’s difficult to think of an example where a charity group or organisation does not need to consider public liability insurance. Most charities have public liability insurance as an enabler of their services, events, and fundraising activities.

You will need public liability insurance if you interact with the public in anyway:

It protects against accidental property damage or injury to a member of the public.
It will cover the payment of legal costs and damages to defend a claim against your organisation.
It can also provide cover for your volunteers. However, check this with your provider as approaches can vary.

Public liability can also include product liability if you make or sell goods. And property owners’ liability if you’re responsible for, or own a building.

What other types of cover might you need?

In this section I will talk through other types of insurance cover that you may find helpful and relevant to your organisation.

Trustee indemnity insurance. Regardless of good intent, trustees can be held liable for poor decisions or wrongful actions, if they have caused a loss to the group. Trustee indemnity insurance covers the legal expenses of defending a trustee against disqualification investigations or even extradition proceedings. Trustees should give serious consideration to this cover. Without it, should an allegation of mismanagement be made against them, they may need to defend the claim out of their own personal wealth.
Personal accident insurance. This provides a financial benefit should an employee, volunteer or trustee suffer accidental bodily injury whilst carrying out their duties for your organisation.
Insurance for vehicles kept on the road will cover the vehicles that you own as an organisation.
Product liability insurance is relevant if you make or sell goods. This may be covered under public liability insurance, however, if not, you may need to take it out separately.
Professional indemnity insurance. This insurance covers your group against poor or negligent advice provided to service users, which has resulted in them suffering a financial loss. It’s generally considered essential if your group provides advice and an example would be offering counselling sessions. It covers the legal costs in defending a claim as well as any compensation or damages payable to the claimant.
Employers’ liability insurance. If your community group has employees, employer liability insurance is a legal requirement. It covers your group against allegations of injury or illness suffered by staff during their employment. Without it, your group could face a fine of up to £2500 for every day it is uninsured.
Buildings and contents insurance. If your charity owns a property, you may want to insure it against damage from risks such as flood, fire, or malicious damage. Whether it’s a large community building or a small wooden pavilion, it can help.
If your charity is not responsible for insuring the premises itself, but you still want to protect the contents held within it, then contents insurance will be relevant for you. This will protect items such as office equipment, furniture and tools.

So how do you make sure that you’re getting the cover that you need?

Make sure that the person talking to the insurance companies knows about how you operate and the services that you provide.

This will enable you to act together with the insurance provider to ensure that all your activities and assets are covered.

It is also helpful to keep a note of the conversations that you have. This will help you to compare the different offers, make sure that you’re getting the best quote and have something to look back on at a later date.

Preparing for a quote

During the process of getting a quote, you will be asked questions about your organisation.

Within this section, I will talk through some of the key things that the insurance provider is likely to ask you about, so that you can be prepared.

People: If you have paid staff, you may be asked for payroll numbers. If you have volunteers, you might be asked how many. You might also be asked the total number of volunteer hours, perhaps in an average week.

Events: And then, if you hold a lot of fundraising events, you’ll need to know how many events you run each year, how many people attend and how much cover you need for money that is being handled during the event.

Buildings: If you need cover for a building, your insurer may want to know the cost of rebuilding your property.

Safety: If you work closely with children or adults at risk, you may also be asked about your safeguarding policies and procedures. It is also very likely that you’ll be asked if your organisation completes risk assessments.

Risk assessments in five steps

Having your risk assessment in place and documented is important, as it creates awareness of the risks and hazards your organisation faces and reduces the likelihood of damage.

It also provides crucial evidence in defending a claim. To help you prepare and maintain your risk assessment you can follow these five simple steps. We’ve also provided some further information in the guidance links.

Firstly, identify the hazards associated with your work or services.
Identify who might be harmed, and how. This might include your staff, volunteers, service users and members of the public, etc.
Evaluate the risks and controls. What are you already doing? What measures are in place? What further action do you need to take?
Record, communicate and retain documentation. It is important to keep a record of the controls that you put in place. This will usually be in a form of a risk assessment and a health and safety policy. This is key to demonstrating that your organisation has considered all the guidance and, if something were to happen, took reasonable steps to measure and manage risk.
Lastly, remember to monitor the controls that you’ve put in place and review them, as things change. Your risk assessments should be working documents, rather than something that sits on the shelf.

Key points to bear in mind

In summary, if you’re a small charity or voluntary group that needs to get insurance, you might like to keep these key points in mind.

Firstly, it is the management committee’s responsibility to make sure that you have the insurance that you need.
Secondly, do your homework. Make sure you understand what your organisation’s activities and assets are, to make sure that you get the best cover for you.
If you are unsure or have more complex needs as an organisation, talk to an insurance broker if you can.
Also remember to update your policies as needed.
If your situation changes and you start delivering new activities or have different assets, remember to contact your insurer and update your policy.

We hope that you have found this module helpful

However, if you need some help, do contact us on info@supportcambridgeshire.org.uk and don’t forget to check out our guidance links for more information.

Guidance links and sources

Insurance

Risk assessments

Health & Safety Executive, risk assessment template and example
Resource Centre, health & safety for community groups

Contacts for insurance: please note, this does not constitute a recommendation for any of the companies or their products by Support Cambridgeshire.