1. Why should a charity or non profit organisation obtain insurance?
The main purpose of a charity or a voluntary organisation is to provide a service for others and raise money to ensure that they can continue with their activities. Just like any organisation, whether it is a non profit making venture or not, there is a duty of care to its employees, volunteers and members of the public. If adequate insurance is not in place, then an organisation could be held liable for any injury or damage and any costs would need to be settled by the charity or not for profit organisation directly. By obtaining charity insurance, you can ensure that your voluntary group is suitably protected in the event of a claim being made.
2. Is any part of charity insurance compulsory?
Yes, in UK law, all employers must obtain Employers’ liability insurance. A certificate is issued on an annual basis showing that a valid policy is in place and this should be displayed in a prominent position at the place of employment. After use, each certificate must be retained for 40 years.
3. What about public liability insurance?
It is not a legal requirement to have public liability insurance; however, it is strongly recommended that this cover is obtained to ensure that your charity or not for profit organisation is protected in the event of a claim involving an injury to a member of the public or loss/damage to third party property.
- For example, if a charity shop customer injures themselves on the premises by tripping on loose carpet, then the charity could be held liable and have to pay the legal costs of defence as well as compensation.
4. Why do sums insured need to be adequate?
It is important that you insure your items on the correct basis and have adequate sums insured so that the full amount will be paid out should a claim arise. You should insure your items for the total cost to rebuild or replace them. If you were to make a claim under your policy and your sums insured were too low then insurers are likely to impose the ‘average condition’. This means that the amount that will be paid out by insurers will be reduced in proportion to the underinsurance and as a result you will be liable for the difference.
5. How can a voluntary organisation obtain insurance for items which are taken away from the premises?
‘All Risks’ insurance can be provided for any items which may be taken off site. This cover can be arranged under a combined insurance policy and you can have cover for these items within the United Kingdom, Europe or Worldwide.
6. Will my Employers Liability insurance cover the activities of volunteers?
Yes, as a charity insurance specialist, we work with insurers who can automatically include cover for any injury or damage to volunteers which is sustained during the course of their activities.
7. What happens if a charity or non profit organisation undertake extreme or hazardous activities / events such as sky-diving, the use of chain saws or bungee jumping?
We have insured many weird and wonderful events that charities have held for fundraising purposes in the past. Details of any dangerous or unusual activities should always be notified to insurers prior to them occurring so that they can consider whether the policy can be extended to cover such activities. Sometimes we will need to charge an additional premium to reflect the high risk nature of the activities.
8. Does a third sector organisation need to obtain Public Liability insurance for an event if it is being held at a third party premises that have their own insurance in place?
Whilst the third party premises may have Public Liability insurance, this will only cover their organisations’ liability if injury or damage is sustained by a member of the public as a result of their negligence, such as injury to an attendee of an event because of a lack of building maintenance.
As this policy will not extend to cover your event activities, then it is strongly recommended that you obtain your own insurance so that you are adequately protected. Most third party venues will often ask to see proof of your public liability insurance before an event takes place and we are happy to provide you with a confirmation of cover certificate to ensure your event can proceed without a hitch.
9. Will an organisation be automatically covered for any charitable activities which take place away from the premises?
No, you will need to ensure that full details of any activities undertaken outside of the premises are notified to insurers so that we can advise you as to the appropriate cover required as well as any terms and conditions that may need to be applied.
10. What is employment practices liability insurance and why should a voluntary organisation purchase this cover?
There have been several new laws and changes to existing legislation over recent years which focus on the protection of employees including the Employment Act 2002, the Race Relations Act and the Sex Discrimination Act.
Due to these changes and as a result of various cases which have been heavily reported in the press, it is becoming increasingly easier for actions to be raised with organisations by dissatisfied employees.
In view of this, there is now the option for charities and voluntary organisations to arrange employment practices liability cover. This insurance provides an organisation with protection in respect of legal costs and expenses and court awards for a wide range of employment disputes including discrimination due to an individual’s sex, race, disability, religion, belief or sexual orientation as well as matters such as unfair or constructive dismissal of an employee. This insurance will also cover questionable allegations which can be very expensive to defend.