Insurance for Charities

Covering your sweet charity

Many charities rely on the support of volunteers. These volunteers will work for a charity unpaid and offer their services out of good will to a charitable organisation. It is a common misconception that a charity does not need employers liability insurance for volunteers due to the fact that they are unpaid workers.

A charity owes a duty of care to its volunteers just as it owes a duty of care to its employees. For this reason, it is essential for charities to have employers liability insurance that covers its entire staff. Even if a charity consists only of volunteers, it is still necessary to have an employers liability insurance policy that protects volunteers in the event of an accident at work.

The same health and safety rules and risk assessment rules apply to charities just as they do to other businesses. Any failure to have employers liability insurance can result in similar action being brought against a charity that would be brought against any other business.

Action that can be brought against a charity includes potentially large fines for failing to have an authorised employers liability insurance policy and using their own funds to resolve claims from volunteers. For a charitable organisation, money that is spent on these claims could be spent on supporting the charities cause. A charity without relevant employers liability insurance could lose funding and could even suffer from a damaged reputation if any claim ever made it public.

Are volunteers covered on a public liability policy?

Insurance policies are legal documents and therefore the way that they are worded is of great significance. Too many charities are under the false impression that as volunteers are unpaid, they will be covered by a public liability insurance policy.

The majority of public liability policies cover ‘third parties’ only. A third party would be somebody who has no direct tie to a business or charity, such as a member of the general public. Volunteers will often be excluded from a public liability policy because they are actually carrying out work for the charity or organisation. They are therefore considered to be ‘employees’ instead of ‘third parties’.

Any doubts as to whether a volunteer and a charity are protected from a potential accident claim should be resolved by seeking a professional to check existing insurance policies. In most instances, public liability will not cover volunteers.

As it is a legal requirement to have Employers Insurance if a business or charity has employees, obtaining Employers Insurance should be a top priority to organisations that are not protected. Failure to do so can result in claims being directly funded by a charity or its trustees, often having dire financial consequences.

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