The work of most voluntary groups involves contact with the general public.  The appropriate level and type of indemnity is therefore an important consideration for the management committee.

Various insurance requirements will be covered under:

Public Liability – A basic requirement for any group wishing to work with members of the general public and covers the organisation for such things as accidental injury to the recipient of the service.

Personal Accident – This insurance will protect the employee and volunteer who are injured or who have an accident whilst working for the organisation.  Not all policies recognise the needs of voluntary groups and the volunteer role of providing both the service and management through committee work.  The insurer needs to be made aware of these factors to provide an appropriate policy.   There are policies developed to meet the needs of the voluntary sector, see below for details.

Employers Liability – Essential if staff is employed.  The current certificate must be displayed at the place of work for the benefit of staff information.  The Health & Safety Executive has this on their checklist when they make their occasional visit.  The Employers Liability Act, (1969), states that all employers must insure against claims made by employees for personal injury and disease, which are caused by, or arise out of, the conditions at work.  A minimum of £5 million cover is normally recommended.

Professional Indemnity – Where organisations provide advice to the general public there is the possibility that someone may seek to sue for compensation if careless or wrong advice is given and, where acted upon, has led to injury, damage or loss.  Professional indemnity insurance protects the organisation against such claims and is normally calculated on a per advisor basis.

Property Insurance – This type of insurance is divided into two elements:

Buildings – If the group are owners of the building used for their business then they have straightforward responsibility to insure the physical structure, the bricks and mortar, against loss or damage resulting from fire, lightning and ‘limited explosion’.    This basic cover can be extended as far as ‘all risks’.  Pay particular attention to the exclusion clauses in any policy.  Ensure that the amount of cover is adequately estimated and takes account of costs that would be incurred by architects, planners, surveyors, for debris removal as well as the normal rebuild.

If the group lease a property for their business then responsibility for insuring the premises may be the responsibility of the owner or the lessee.  The terms of the lease agreement should make this clear.

Buildings can be insured on a reinstatement basis or on an indemnity basis.  An indemnity policy covers the cost of repairing the damage to the building.  If the building is badly damaged this may mean that the building is knocked down and replaced.  Reinstatement indemnity usually costs more because it covers the cost of rebuilding the building in keeping with the former structure.  In the case of listed buildings this may mean the use of particular building materials that are more difficult to obtain.

Contents – Regardless of the ownership of the building the voluntary group will be responsible for the contents, fixtures and fittings, glass, office machinery and money.   The cover is normally for accidental damage and theft but check that cover is for appropriate risks.  Again replacement for new, (a reinstatement policy), or a value as new minus wear and tear basis, (an indemnity policy), should be decided upon.

Loss of no claims bonus and Excess Protection for volunteers – Car schemes will invariably have volunteer car drivers whose normal cover is through their own car insurance.  In the case of an accident however, the volunteer will often lose out through loss of no claims over one or more years, and having to cover the excess on their policy in respect of car repairs.

Special Events – Where special events are held, i.e. carnivals etc. when large numbers of the general public are involved a separate insurance is usually required.  Most insurers will quote for these events under one-off, short-term policies.

Trustee Liability – Indemnity insurance for trustees is personal insurance, which protects them against the risk of personal liability arising from their breach of trust.  It should be noted that trustees are fully protected by the general law of trusts unless they have acted contrary to any appropriate legal or other professional advice they have obtained or have failed to act in accordance with the terms of the charity’s governing document.   The general advice for unincorporated associations is to avoid entering into contracts for amounts in excess of the value of the organisations’ assets.   In the case of a charity the governing document must expressly provide the power to buy indemnity insurance for trustees.  If this does not exist trustees may apply to the Charity Commission, see CC49 - Charities And Insurance on Charity Commission Website (www.charitycommission.org.uk).

Below are a range of issues that should be considered in relation to insurance:

Insurance relating to employers and workers:

• employer’s liability
• health care insurance
• permanent health or income protection insurance
• critical illness insurance
• sickness insurance
• personal accident insurance
• life insurance or death-in-service insurance
• key worker insurance
• travel insurance

Insurance for claims by third parties

• public liability, personal injury (PI) or third party insurance
• member-to-member insurance
• special events or special activities insurance
• professional liability, professional indemnity, errors and omissions or malpractice insurance
• product liability insurance
• consequential loss insurance

Protecting the organisation’s assets

• buildings insurance
• contents insurance
• fidelity guarantee insurance
• credit insurance

Loss to the organisation

• business interruption, loss of business or consequential loss insurance
• cancellation insurance
• non-appearance insurance
• pluvius insurance
• legal costs or legal expenses insurance
• charity protection or trust indemnity insurance
• Trustee indemnity, directors’ and officers’ insurance

One insurance agent with established policies under their Special Schemes Insurance for Voluntary and Charitable Organisations using insurers such as Cornhill, is:

Aon Limited
5th Floor
Capital House
1 Houndwell Place
Southampton
SO14 1HU

Tel: 0845 740 2003

Voluntary Action Luton cannot make insurance recommendations, as there are many other insurers in the market such as Norwich Union.  Our advice is that any organisation should ensure that the policies offered meet the real need.

Publications referenced in production of this section:

Author:              The Charity Commission       Booklet CC49 Charities and Insurance

Further information:

Brokers: British Insurance Brokers Association www.biba.org.uk

Names of insurers for voluntary organisations:                                                                          National Council for Voluntary Organisations www.ncvo-vol.org.uk

Umbrella organisations, councils for voluntary service /                                                              e.g. Voluntary Action Luton www.voluntaryworks.org.uk/valuton/   

Sports activities: Central Council of Physical Recreation www.ccpr.org.uk

Vehicles and drivers: Community Transport Association www.communitytransport.com

Volunteers: Volunteer England www.volunteering.org.uk

Complaints: Association of British Insurers www.abi.org.uk

Registration:  Institute of Insurance Brokers, Tel: 01933 410003