In our latest Quiz The Team feature, we asked our Charity Insurance team to share their insights on some of the most common insurance questions facing charities today.
- What types of insurance should every charity consider having in place?
There is no one-size-fits-all insurance programme for charities, and that’s what makes it such a great sector to work in. Public Liability, Employers’ Liability and property insurance are the obvious starting points, but beyond that it really comes down to what the charity actually does. A donkey sanctuary, a food bank, a church, a housing charity and an advice service all bring very different risks. The biggest mistake I see is charities treating renewal as a procurement exercise designed to shave a few pounds off the premium. Insurance should start with understanding the risks you face, not the price you want to pay. My advice is always the same: find a broker who genuinely understands your sector, challenges your assumptions and can help you identify gaps before they become claims.
- What is Trustee Indemnity Insurance and why might a charity need it?
Most trustees are volunteers giving up their time because they care about a cause. What many don’t realise is that with that responsibility comes personal accountability. Trustee Indemnity Insurance is designed to protect trustees if decisions they make in good faith are later challenged. Claims and allegations can arise even where trustees believe they have acted appropriately. Even if you’ve done nothing wrong, defending yourself can still involve significant time and expenses. The reality is that attracting good trustees is hard enough. If you’re asking people to give up their time, share their expertise and help govern an organisation, I think you should also be thinking about how you’d support them if something went wrong.
- What are the most common claims charities face?
Slips, trips, property damage and accidental damage are still common, but if I had to point to the area causing more concern at the moment, it would be employment-related claims. Employment Practices Liability claims can arise from allegations of unfair dismissal, discrimination, harassment or other workplace disputes. What has changed is how easy it now is for employees to access guidance online. With the emergence of AI tools such as ChatGPT, an aggrieved employee can very quickly research their position, draft correspondence and escalate a complaint. That doesn’t mean every claim is valid, but it does mean charities need to be much sharper on HR procedures, record keeping and how decisions are documented.
- What risks are often overlooked when insuring charity premises?
I regularly speak to charities that haven’t reviewed their rebuilding costs for years. They know what the building is worth on the open market, but that’s not the same as what it would cost to rebuild after a major fire or flood. I also think many organisations focus too heavily on the bricks and mortar and forget about everything that happens inside the building. Donated equipment, community hall hire, listed features, solar panels, storage buildings and loss of income can all be overlooked. My view is simple: if a loss happened tomorrow, could the charity reopen and continue operating? That’s the question every organisation should be asking itself.
- What impact could a cyber-attack have on a charity’s operations and reputation?
I still hear charities say, “We’re too small to be targeted.” Unfortunately, cyber criminals don’t see it that way. Many charities hold large volumes of sensitive information relating to donors, beneficiaries, volunteers and employees. If systems are compromised, services can grind to a halt overnight, fundraising can be disrupted, and people can lose access to information they rely on. The financial impact is often what gets discussed first, but personally I think the reputational impact can be even worse. Charities survive on trust. If donors and beneficiaries lose confidence in how their information is handled, rebuilding that trust can take far longer than recovering the financial loss. Cyber Insurance is becoming an increasingly important consideration, but I would always rather see a charity invest in staff training and robust processes before relying on an insurance policy to save the day.
- If you could give charity leaders one piece of insurance advice, what would it be?
Don’t treat insurance as an annual purchasing exercise!!
Regular communication with your broker throughout the year, particularly when activities change, new services are introduced, income grows, or significant projects are planned can help ensure your insurance outcomes remain appropriate. Notifying your broker of major changes as they occur may help ensure that relevant information is taken into account when reviewing your insurance. A broker should act as a risk adviser, not just an insurance buyer; the more they understand your charity, the better they can help find and discuss insurance options available to them and identify potential gaps in cover.