Why does your charity need insurance?

Ask yourself:

• What would happen to your organisation if it suffered a serious loss, which you found out wasn’t insured? 
• Would your funds be able to cover the loss? 
• Would your trustees be personally liable for loss? 

This could have a devastating effect on your charity or business. In the worst cases, you may have to close, cut back or stop your core activities. The loss may not only be the cost of replacing physical assets such as buildings and equipment, but also the loss of income while these are replaced. It could also be the cost of medical expenses following an accident. The costs of claims made against your organisation could be damaging, both in terms of finance and reputation. 

Your risks can be reduced, but not removed

Always start with risk management, identifying the risks associated with your operation, and how they can be managed. But risk assessment alone only goes so far. You can minimise the risks, but in some cases you do not want to or cannot eliminate the risk completely, e.g. outdoor residential courses to develop young people’s skills and confidence or family hosting schemes. Also, some risks are outside your control.

Insurance can mitigate those risks you cannot completely control or remove. Insurance safeguards individuals, organisations and/or their property against the risk of loss, damage or theft, accidents or liability claims. 

Your legal requirements 

Some types of insurance cover are required by law. If you employ people or own motor vehicles, you must take out the necessary insurance. 

Anyone who is an employer must have Employers’ Liability to cover a claim for injury to an employee. 

Just like running your own car, motor insurance for charities is a legal necessity. Every organisation that owns, leases or uses vehicles must have a minimum of third party cover.

Getting the right insurance cover for your organisation

Not all insurance policies are the same. You should arrange insurance that covers your own particular circumstances and specific risks. You should regularly review your insurance cover as your circumstances may change.