Insurance and Risk Management

Article modified: February 2017, Author:


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Risk Assessment

Introduction

Deciding what insurance cover an organisation needs, and getting the best fit/deal isn’t that easy. The possibilities can be frightening, but remember that accidents which you consider unlikely may well attract a low premium (cost). On the other hand, it may prove impossible to locate a sensible quote if you can’t pin down the nature of the risk (e.g. if you don’t have a clear grasp on what volunteers in the field actually do).

Possible cover

If you employ any staff, you must have employers liability insurance, and volunteers ought to be covered for their activities too. Public liability is to insure against damage to ‘third parties’ aka the general public – this may or may not extend to members, casual volunteers or paying customers so check.

Giving advice? Professional liability or similar cover may best come via a sector body. Travel cover for staff within the UK for short trips may come as standard in an insurance package, but how easy is it to extend further afield, or longer stays? What records are you going to have to keep to keep within insurance limits and/or provide an end-of-year return?

Note that there is some debate about whether trustee liability policies are worth the paper they are written on.

Most insurers will offer to do a ‘review’ of your cover to attract your interest or keep your business (as long as the likely premium is worth their while), but remember to treat this as partly a sales pitch.

Buildings

The landlord normally insures the fabric of the building, but the cost is almost always passed on. What about any alterations/improvements you have carried out/funded, including fixtures and fittings? Equipment normally goes under Contents, but some specialist items may need specific cover (due to value, high risk).

Events

Public liability insurance is essential for any major event, and advisable for smaller ones too. Some venues have this as a requirement and will want to see proof of a minimum level of cover (£2 million is often advised nowadays).

‘Pluvius’ insurance – cover for an event being rained off or otherwise cancelled (other than due to poor bookings).

All Risks – will the equipment be covered? For some organisations, insuring through the hire company makes good sense, but if you already have some all risks cover, it is likely to be cheaper to arrange it yourself.

Make sure your employers liability covers any volunteers and temps you use.

Events involving travel abroad raise a whole bundle of issues. Take advice! Also see Advice for Charities and Organisations offering Air Travel as part of a fund raising exercise, January 2004: Guidance note 24 The ATOL Regulations (in pdf/Acrobat format 25kb). Note that this link keeps changing – we can’t find it at July 2010 but is should be on CAA site somewhere!

Risk Management

Insurance firms may offer to carry out a free risk management review for your organisation as part of winning your business, or for a small fee. This is unlikely to cover all the issues which need to be covered for an organisation’s risk management policy (which charities are required to report on in their annual accounts). An overall policy will also need to look at such risks as grants not being renewed, changes in legislation or competition impacting on service delivery and other areas not usually considered as insurable.

Implementing health and safety measures is increasingly seen as part of keeping down insurance premiums (although there may not be a direct link), but should also be a part of good practice. Other specific risk management areas include fire and crime prevention, disaster recovery planning, key worker absence. See HSE’s Risk Management pages – the Five steps to Risk Assessment leaflet (pdf, revised July 06) is a good starter.



Risk Resources

See Health and Safety page, but also specific resources under Running an Event, Volunteer Management etc.

Accountancy firms are another source of risk management advice, especially in the light of the requirement for charities to report on this in their annual accounts.

Volunteering Australia has Running the Risk? – find the pdf on their resources page. A risk management tool for volunteer involving organisations. The American NonProfit Risk Management Center site has some info on their subject, but most is only available in printed form.

Volunteering England has some risk assessment material.

Insurance Resources

The Charity Commission booklet on insurance (CC49) indicates that a number of national associations have specialist schemes or contacts. You will probably need to be a member organisation to access the services offered.

These are the schemes plus other useful bodies in this area:

Sources of Legal information will also tend to give advice on cover required.

Volunteering England has an information sheet on policy types to consider to cover volunteers, but now available to members only.

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