Insurance is something we need. We sometimes resent having to pay it, and we certainly never want to claim – it will mean something has gone wrong and the trouble it causes can be a nightmare. But VCSE organizations must ensure that they obtains adequate cover for the work it undertakes. Be aware of what could go wrong and think about how likely it is to happen and how expensive it could be.
Here are some of the kinds of insurance you many need.
Public Liability Insurance
Here, “public” means virtually everyone except the organisation’s employees. The policy may or may not include volunteers (check the small print). Public liability insurance covers personal injury or property damage caused by the organisation’s negligence or failure to comply with statutory duties. It could cover, for example, claims arising from:
- a worker breaking client’s property while visiting the client at home
- theft of a service user’s property from a community centre
- someone who has booked a room in your premises being injured
- a child injured on faulty play equipment
Employers Liability Insurance
If the organisation employs staff, it has a statutory duty (you must have this) to insure against claims by workers for illness, injury or disease caused by an employer’s negligence or breach of duty. There is a minimum statutory cover for this insurance cover. It is a legal requirement that the Employers Liability Insurance Certificate is prominently displayed in the workplace and that expired certificates are kept for 40 years.
If the organisation leases a building it may be responsible for insuring the premises for the costs of rebuilding. If it owns the building, it does not by law have to insure the premises. However, the trustees of a registered charity, who have a statutory duty to safeguard the charity’s assets, could be considered to be in dereliction of their duty if they did not insure the buildings they own. The costs of rebuilding, including all professional fees such as the legal fees, and the cost of temporary accommodation during re-building should be covered.
Road Traffic Insurance
Any organisation that has a vehicle on the road must insure the driver(s) against third party risks (injury or death caused to other road users). Third party fire and theft or fully comprehensive insurance will give much better cover. An organisation must also ensure that vehicles owned by employees or volunteers are adequately covered if they are to be used for work purposes.
Plate Glass Windows
If the organisation leases property that has a shop front it may need special insurance to cover breakage either by vandals or accident.
Professional Indemnity Insurance
If the organisation provides advice or information to the general public this type of policy gives cover against any claims resulting from wrong advice. It can be extended to cover slander or libel which may be essential for campaigning organisations.
This gives cover against theft or damage, including fire.
- This type of cover may require you to comply with the insurer’s requests for secure locks, safes, burglar alarms, etc. to be installed to the premises.
- If volunteers have access to equipment and if your premises or equipment are shared with any other organisation you should inform the insurer.
- You should keep an up-to-date list of the ‘contents’ which you consider are covered and review the amount insured annually.
- Insuring property for less than its real value could invalidate the cover or mean that any claim will only be partially accepted.
All Risks Insurance
This insurance extends Contents Insurance to cover property which is used away from the organisation’s main base.
This insurance is usually expensive, as it covers accidental damage to property. If the organisation shares equipment with anyone else it must tell the insurer. (It may be cheaper to hire expensive equipment such as video cameras.)
Equipment Damage and Breakdown
If your organisation has highly technical equipment such as computers, and depends heavily on them, you can insure them against damage and breakdown.
Accident and Medical Insurance
An organisation can insure against staff being off sick, including the cost of paying out sick pay. Some policies will also cover for staff sustaining injuries whilst as work.
Trustee Liability Insurance
Management Committees members may wish to have insurance cover for protection against personal claims against them. No insurance policy will give cover for dishonesty or fraud, nor will it affect the legal duty of trustees to “act in good faith, with reasonable care” for the organisation. If the organisation is a registered charity it needs the approval of the Charity Commissioners before paying for Trustee Liability Insurance (this permission is included in some of the more recent governing documents). It is important to keep the risk of personal liability in proportion. Very few trustees who have acted honestly suffer financial loss as a result of their trusteeship.
As always the case with something complex it is best to talk to an expert. You will be able to talk abut your organization and what it does so that you have the right amount of protection.