In response to a request from one of our charity partners, I’d like to outline some key considerations to think about when buying insurance for your charity. What cover do you need? What’s important when choosing a broker? What should you look for in an insurer? Why is it worth thinking about your insurance programme throughout the year and not just at renewal? There’s lots to cover, so let’s get stuck in.
Cover to consider
Each charity is different and the insurance needed depends on the people it supports, the properties it owns or leases, the vehicles it uses and the activities it carries out.
First and foremost, there are some mandatory covers you need – Employers’ Liability (EL) and Motor Insurance (if you own vehicles). In the charity sector, the EL policy needs to cover volunteers as well as paid employees, and so you’ll need to check your policy does this.
While not mandatory, trustee indemnity cover is becoming increasingly important to protect trustees in the event that a legal claim is made against them. Such claims can range from alleged misuse of funds to alleged unfair dismissal and these are not uncommon.
Public Liability and Buildings & Contents Insurance aren’t required by law, although it might be a contractual obligation put in place by a funder, a landlord or mortgage lender. Few organisations have the resources to leave these important aspects uninsured.
There are specialist insurance products that package many of the covers required by charities into one single policy. But in some cases, these won’t provide all the cover required.
For example, Cyber Cover is often not included in these types of products. And if a charity’s buildings are used for unusual or high risk activities or its vehicles are used in specialist ways, such as transporting patients, for example – standard packaged products may not provide the property or motor cover you need.
The charity sector is comprised of an exceptionally varied range of operating models, activities and services. Organisations have to evolve quickly to adapt to the changing needs of those they support and this means their risks and insurance requirements must also adapt quickly.
This is one of the reasons why working with a respected broker, who can help identify exactly what insurance cover you need, is a very wise decision.
Choosing a broker
Referrals are a good indication of a reliable broker and make a robust starting point for your search. Another good place to begin is with specialist sector bodies such as the Scottish Council for Voluntary Organisations, Social Enterprise Scotland and Social Enterprise UK orvia the Scottish Charity Regulator (OSCR) and the Charity Commission for England and Wales.
They’ll point you in the right direction and may have a list of accredited suppliers – including insurance brokers. When you speak to prospective brokers, find out about their track record of dealing with similar organisations to yours and get a feel for just how well they understand your operations.
Also, what type of service do you need? Do you want face-to-face advice and the ability to speak to an account manager or are you happy to do everything online? Perhaps a mixture of the two works best? Finding out how a broker works will enable you to ensure that their model matches your needs.
Once you’ve chosen a broker, they’ll help you identify all the risks you have and detail the insurance you need to cover them effectively. This might be in the form of a packaged product, a number of individual insurance policies or a blend of both. Your broker will also help you select insurers based not just on the cover and price they offer, but also on the claims service they provide.
In the event of a claim, your broker is your first point of contact. They’ll represent your interests and help you prepare your claim professionally, so you get the best outcome and the fullest settlement. Similarly, they’ll help you navigate the process and deal with the various parties involved, ranging from the insurer and loss adjuster to the various claims management firms that may be part of the process.
Ongoing risk management
The best way to avoid a loss and to mitigate the impact of those that do occur is to proactively manage your risks. Working with your broker and insurer partners will give you access to expert guidance on the physical and procedural steps you take to make your organisation less likely to suffer a loss and more resilient to those that happen.
Similarly, if you change the type of activities you do, the events you hold, the equipment you have or the way you use the premises, it’s important to let your broker and insurer know. Any material change to the assets you have or the way you work could increase or decrease the level of cover you need and may affect whether or not your policy will respond when needed.
Your insurance programme might not always feel like a priority, but if you can actively engage with your broker and insurer throughout the year, you’ll keep on top of the changes and updates needed to improve your risk exposure and ensure that your cover continues to be aligned with your requirements.
And when you do come to renewal time, you’ll be in a stronger position to negotiate the best deal.
