Charity Insurance UK: What Cover Does Your Organisation Need?

Why charity insurance is a governance issue, not just a purchase

Charities face many of the same risks as ordinary businesses: members of the public can be injured, property can be damaged, staff can bring claims, and professional advice can go wrong. What makes the charity sector distinctive is the layer of legal duty that sits on top of those risks. Under charity law, trustees are responsible for protecting the assets and reputation of the organisation, and that responsibility extends to identifying which risks should be insured and which can be managed in other ways.

The Charity Commission for England and Wales treats insurance as part of good governance. Its guidance makes clear that trustees should consider what could go wrong, weigh the likelihood and seriousness of each risk, and decide whether insurance is a proportionate response. This is an active duty: a trustee board that has never reviewed its cover is arguably falling short of its duty of care, even if no claim ever materialises. The same broad principles apply across the UK, with the Office of the Scottish Charity Regulator and the Charity Commission for Northern Ireland setting parallel expectations.

For smaller charities run largely by volunteers, this can feel disproportionate. The practical answer is that insurance is one of the few tools that converts an unpredictable, potentially organisation-ending liability into a known annual cost. A single serious injury claim at a public event, or a safeguarding allegation against the organisation, can dwarf a small charity's reserves. Insurance is how trustees protect beneficiaries from that volatility.

The core covers most charities should consider

There is no single charity insurance product. Instead, charities assemble cover from familiar building blocks, often bundled into a combined charity policy by insurers who specialise in the voluntary sector. The blocks that matter most are set out below.

Employers liability insurance

If a charity employs anyone under a contract of service, employers liability cover is a legal requirement. The Employers Liability (Compulsory Insurance) Act 1969 sets a statutory minimum of 5 million pounds, though most policies provide 10 million pounds as standard. The duty applies whether staff are full-time, part-time, temporary or casual. Failure to hold valid cover can lead to penalties enforced by the Health and Safety Executive, and the certificate must be made available to staff. Charities that operate entirely through volunteers and have no contracts of employment are generally outside this requirement, but the moment a paid employee is taken on, the obligation crystallises.

Public liability insurance

Public liability cover responds when a member of the public, a beneficiary, a service user or a visitor suffers injury or property damage connected to the charity's activities. It is not legally compulsory, but for any charity that runs events, opens premises to the public, delivers services in the community, or sends volunteers into other people's homes, it is widely regarded as essential. Fundraising stalls, fetes, sponsored walks and community activities all carry the kind of exposure that public liability is designed to absorb. Cover limits commonly run from 1 million to 10 million pounds, with higher limits expected for larger public events.

Trustee indemnity insurance

Trustees can be held personally liable for losses caused by a breach of their duties, even though they usually act unpaid. Trustee indemnity insurance, sometimes written alongside directors and officers cover for incorporated charities, protects trustees against personal liability for honest mistakes, mismanagement claims and certain defence costs. It does not cover fraud, dishonesty or deliberate wrongdoing. Under the Charities Act 2011, trustees may purchase this cover out of charity funds without seeking prior Charity Commission authority, as long as the charity's governing document does not prohibit it. Where the governing document is silent or restrictive, trustees should take advice before buying the cover from charity money.

Property, contents and money cover

Charities that own or rent premises, hold stock for a charity shop, or keep equipment need property and contents insurance against fire, flood, theft and accidental damage. Money cover protects cash takings from fundraising and shops, both on the premises and in transit to the bank. Charities running shops or cafes should also consider stock and business interruption elements so that income can be replaced if the premises become unusable.

Professional indemnity and other specialist covers

Charities that give advice, deliver counselling, advocacy or professional services should consider professional indemnity insurance, which responds to claims arising from negligent advice or services. Depending on activities, a board may also weigh cyber cover, trustee and fidelity cover against theft by insiders, motor cover for charity vehicles or minibuses, and event-specific or contingency cover for large public gatherings.

Volunteers, events and fundraising: the charity-specific risks

Volunteers are the area where charity cover differs most from ordinary commercial insurance. Because volunteers are not employees, they generally fall outside employers liability. Instead, injury caused to a volunteer, or by a volunteer to a third party, is usually addressed through public liability cover. The wording matters: trustees should confirm in writing that the policy treats volunteers as covered persons rather than excluded outsiders, and that any volunteers driving for the charity have appropriate motor arrangements.

Public events bring concentrated, short-lived risk. A summer fete, a sponsored run, a Christmas fair or a community open day can put hundreds of members of the public in contact with the charity in a single afternoon. Trustees should check whether the standard public liability limit is adequate for the expected crowd, whether any external contractors such as bouncy castle operators carry their own cover, and whether the venue imposes its own insurance conditions. Fundraising activity raises related questions: street collections, online appeals and gaming or raffle activity each carry compliance and liability dimensions that a charity board should map against its policy schedule.

Charity activity type, cover required and cover recommended

The table below shows how different charity activities tend to map onto the core covers. Required means legally or contractually compulsory in typical circumstances; recommended means strongly advisable for prudent risk management.

Trustees, duty of care and the Charity Commission's expectations

The legal backdrop is the trustee duty of care. Trustees must act in the charity's best interests, manage resources responsibly, and act with reasonable care and skill. Translated into insurance terms, this means a board should periodically list its activities and assets, identify what could realistically go wrong, and decide whether insurance is a proportionate way to manage each risk. The Charity Commission does not prescribe specific policies or limits, because the right answer depends on what the charity actually does. What it expects is a deliberate, recorded decision rather than drift.

Good practice is to record the insurance review in trustee minutes, including the covers held, the limits, the renewal date and the rationale for any risks the board has chosen not to insure. This protects the trustees by demonstrating that they discharged their duty thoughtfully, and it gives successors a clear picture at handover. Where a charity is incorporated, for example as a charitable incorporated organisation or a charitable company, directors and officers exposures should be reviewed alongside trustee indemnity.

How to find a suitable charity insurer

Charity insurance is a specialist field, and several UK insurers focus heavily on the voluntary sector. A practical filter is to look for insurers and brokers that are members of the Association of British Insurers, the trade body whose members commit to recognised standards. The ABI publishes member listings and consumer guidance that help charities understand the products available without relying on comparison sites. Trustees can also approach a broker who specialises in charities, since brokers can assemble combined policies and explain wording around volunteers and events.

When comparing quotes, focus on the policy wording rather than headline price. Check that volunteers and trustees are named as covered persons, that event activities are not silently excluded, that the public liability limit suits the largest gatherings the charity holds, and that any abuse or safeguarding cover reflects the charity's work with vulnerable groups. A cheap policy that excludes the charity's main activity offers false economy.

Frequently Asked Questions

Does a charity need employers liability insurance?

A charity must hold employers liability insurance if it has any paid employees under a contract of service, including part-time, casual or temporary staff. The Employers Liability (Compulsory Insurance) Act 1969 sets a statutory minimum of 5 million pounds. Charities operated entirely by volunteers with no employment contracts are usually outside this legal requirement.

What is trustee indemnity insurance?

Trustee indemnity insurance protects individual trustees against personal liability for losses caused by an honest breach of their duties, along with certain defence costs. It does not cover fraud, dishonesty or deliberate wrongdoing. Under the Charities Act 2011 it can usually be bought from charity funds without prior Charity Commission consent, provided the governing document does not forbid it.

Does charity insurance cover volunteers?

Volunteers are not employees, so they are normally covered under public liability rather than employers liability. Trustees should confirm in writing that the policy explicitly treats volunteers as covered persons, both for injuries they suffer and for injury or damage they cause to others, since wordings vary between insurers.

What is the Charity Commission's guidance on insurance?

The Charity Commission expects trustees to assess insurable risks as part of their duty of care, deciding whether insurance is a proportionate response to each risk the charity faces. It does not mandate specific policies or limits. Trustees are advised to record their insurance decisions, including covers held and risks consciously left uninsured, in board minutes.

How much does charity insurance cost?

Cost depends on the charity's activities, income, number of staff, premises and the cover limits chosen, so there is no fixed price. A small volunteer-run charity may pay a modest annual premium for combined public liability and trustee indemnity, while a charity with employees, premises and large public events will pay considerably more. Trustees should obtain tailored quotes based on their actual activities.