If your organisation employs staff, Employers’ Liability Insurance will normally be required by law.

Employers must generally have cover of at least £5 million from an authorised insurer. The insurance helps meet compensation costs where an employee becomes ill or is injured because of the work they undertake.

Employers must also make their Employers’ Liability insurance certificate available to employees. This can be displayed electronically, for example on an organisation’s intranet, provided employees know how and where to access it.

There are limited exemptions from the legal requirement, so organisations unsure whether they need cover should seek advice.

Failure to hold appropriate Employers’ Liability Insurance can result in significant fines.

Further information: GOV.UK – Employers’ Liability Insurance

What about volunteers?

Volunteers should not simply be assumed to be covered by an insurance policy.

The Charity Commission recommends that charities check that their insurance specifically includes volunteers, how the policy defines a volunteer, whether there are age restrictions and whether the activities undertaken by volunteers are covered.

Organisations should also make sure volunteers are appropriately included in their risk assessments. Where volunteers undertake similar activities and face similar risks to employees, the Health and Safety Executive recommends providing the same level of protection.

Further information: HSE – Volunteering: guidance for employers

Public Liability Insurance protects an organisation against certain claims from members of the public for injury, illness, loss or property damage arising from the organisation’s activities where it has a legal liability.

Although Public Liability Insurance is not generally compulsory by law, it is appropriate for many VCFSE organisations, particularly those which:

• work directly with members of the public;
• provide activities, services or events;
• own, rent or use community premises;
• work away from their own premises; or
• involve volunteers in delivering activities.

A landlord, venue, local authority, funder or commissioner may also require a particular level of Public Liability Insurance as part of a lease, hire agreement or contract.

There is no general statutory minimum level of Public Liability Insurance. The appropriate limit will depend on the organisation’s activities and risks, as well as any contractual requirements.

Organisations should check that employees, volunteers, trustees and relevant activities are appropriately covered by their policy.

Further information: Charity Commission – Charities and insurance

Buildings Insurance protects against insured damage to buildings owned by an organisation.

If your organisation owns a building, trustees or directors should consider appropriate cover based on the cost of rebuilding the property rather than simply its market value.

Depending on the policy, cover may include elements such as the main structure, fixtures, outbuildings, walls and other permanent features.

If your organisation leases or rents premises, check the lease carefully. The landlord may insure the building, but the organisation could still have responsibilities under the lease or need separate cover for contents, improvements, liabilities and business interruption.

Contents Insurance can protect equipment, furniture and other property belonging to the organisation against specified risks such as fire, flood, theft or accidental damage, depending on the policy.

Organisations should make sure the level of cover reflects the cost of replacing their property. Donated equipment should not necessarily be insured at the amount the organisation paid for it; its current replacement cost may be considerably higher.

If laptops, tablets, cameras or other equipment are regularly taken away from the organisation’s premises, check whether the policy covers equipment while it is being used elsewhere.

Motor insurance is legally required where an organisation owns or operates vehicles on public roads.

Organisations should make sure the insurance reflects how vehicles are actually being used, including any transportation of staff, volunteers, beneficiaries, equipment or members of the public.

Where employees or volunteers use their own vehicles for journeys connected with the organisation, they should check with their own insurer that their motor insurance covers that use. Ordinary social, domestic and pleasure cover may not be sufficient for journeys undertaken on behalf of an organisation.

Organisations may wish to have a system for periodically checking relevant driving licences, MOTs and insurance where staff or volunteers regularly drive as part of their role.

Minibuses and community transport can involve additional insurance and legal requirements, so specialist advice may be appropriate.

Further information: Charity Commission – Charities and insurance

Professional Indemnity Insurance can protect an organisation against certain claims arising from professional advice, information or services it provides.

This may be particularly relevant to organisations providing services such as:

• advice or guidance;
• consultancy;
• counselling or professional support;
• training;
• casework; or
• other specialist or professional services.

For example, an organisation providing advice could face a claim if someone alleges that negligent advice caused them a financial loss.

The exact scope of cover varies considerably, so organisations should ensure the insurer understands the services they provide.

Trustee Indemnity Insurance can provide protection for trustees against certain personal liabilities arising from breaches of trust, breaches of duty or negligence committed in their capacity as trustees.

The rules around purchasing Trustee Indemnity Insurance have changed over time. It is no longer correct to say that a charity without an express power in its governing document must automatically apply to the Charity Commission for permission to purchase it.

The Charities Act 2011 provides charities with a statutory power to purchase Trustee Indemnity Insurance from charity funds, subject to legal requirements. Trustees must be satisfied that purchasing the insurance is in the charity’s best interests and that the cost is reasonable.

Trustee Indemnity Insurance does not provide unlimited protection. Certain liabilities, including some arising from fraud, dishonesty, deliberate wrongdoing or regulatory penalties, cannot be covered under the statutory provisions.

Trustees should check the scope and exclusions of any policy carefully and seek professional advice where appropriate.

Further information: Charity Commission – Charities and insurance

VCFSE organisations increasingly rely on email, cloud services, online banking, websites, databases and other digital systems. Cyber incidents can therefore cause significant disruption even for small organisations.

Cyber Insurance can provide financial protection and specialist support following certain cyber incidents. Depending on the policy, cover may include:

• incident response and IT forensic support;
• restoring systems or data;
• managing a data breach;
• legal support;
• responding to claims from third parties;
• business interruption;
• crisis communications; and
• some forms of cyber-enabled fraud.

However, not every cyber insurance policy covers all cyber incidents or financial losses. For example, some policies may exclude or restrict losses resulting from business email compromise, social engineering or fraudulent payments.

Organisations should therefore check carefully what is covered, the policy limits and exclusions, and what cyber security controls the insurer expects to be maintained.

Cyber insurance should complement good cyber security rather than replace it. The National Cyber Security Centre recommends organisations understand their important systems and data, maintain appropriate cyber security controls and make sure information provided to insurers about those controls remains accurate.

Further information: National Cyber Security Centre – Cyber insurance guidance

Fidelity Guarantee, Crime or Employee Dishonesty Insurance can protect an organisation against certain financial losses caused by fraud, theft or dishonesty by people within the organisation.

Depending on the policy, this may include employees, volunteers, trustees or other people entrusted with the organisation’s money or property.

The terminology and scope of these policies varies between insurers, so organisations should check who is covered and what types of loss are included.

Insurance should sit alongside appropriate financial controls, such as authorisation procedures, segregation of duties and regular financial reporting.

Money Insurance can provide protection for cash belonging to an organisation while it is held on its premises, being transported or, depending on the policy, temporarily held elsewhere.

Some contents policies include limited money cover.

Organisations that regularly handle cash should check:

• how much is covered;
• where it is covered;
• requirements for safes or secure storage;
• arrangements for transporting money; and
• any restrictions applying outside normal working hours.

Organisations running conferences, fundraising events, community events, performances or other activities may wish to consider event insurance.

Depending on the policy, this can provide cover for financial losses resulting from circumstances such as cancellation, adverse weather, damage to equipment or the non-appearance of an essential person.

Event organisers should also check whether their existing Public Liability Insurance covers the event. Venues may require evidence of Public Liability Insurance and may specify a minimum level of cover.

Cover and exclusions vary significantly, particularly for outdoor events, so the policy should reflect the particular event being organised.

Organisations that manufacture, sell or supply products may need Product Liability Insurance.

This can provide protection against certain claims where a product supplied by the organisation causes injury or property damage.

This may be relevant even where products are supplied as part of fundraising or charitable activities rather than through a conventional commercial business.

Legal Expenses Insurance can cover certain legal costs associated with bringing or defending legal proceedings.

Depending on the policy, this might include employment disputes, contractual disputes, property matters or other legal proceedings.

Some insurance packages include an element of legal expenses cover, so check existing policies before purchasing separate insurance.

Damage to premises or equipment can affect an organisation long after the immediate incident has passed.

Business Interruption Insurance can provide cover for certain lost income or additional costs following an insured event which disrupts the organisation’s activities.

VCFSE organisations should consider how they would continue delivering essential services if their building, equipment or systems became unavailable and whether their existing insurance would meet the additional costs involved.