7 Reasons Why Your Organisation Needs Charity Insurance

Charity Insurance

Organisations dedicated to charity work recognise the importance of protecting their resources and personnel. However, many still assume that purchasing charity insurance isn’t necessary. Charity organisations are essential in helping those in need and contributing to the community. 

Additionally, charities are often reliant on volunteers and donations, making it difficult to run the organisation without the right protection measures in place. If you are a charity organisation looking for ways to secure your future, acquiring not for profit insurance is one surefire way to do so.

Not sure of its relevance to your establishment? Here are 7 reasons why your and any charity organisation needs the right protection in order to give back to the community.

Professional Liability

If an unintentional mistake or error occurs, for example in your charity’s outpatient services, professional liability protects you from expensive lawsuits and claims against your company. Professional liability helps prevent financial losses that would otherwise have to be paid out-of-pocket by the organisation for these claims.

Product Liability

Charity insurance provides some coverage if a product manufactured or sold by your charity harms someone else financially or personally. Product liability coverage pays for any legal fees associated with defending the claim as well as offering compensation to any harmed parties up to a predetermined limit.

Property Coverage

Property coverage protects physical assets owned by your charity such as buildings, furniture, equipment, and other supplies used in the running of your operations. This sort of policy is typically offered as part of an all-inclusive business package, with other features like liability included. 

Employment Practices Liability

Not only do charities need to protect their staff members through safe workplace policies, but they may face potential lawsuits regarding employment practices such as discrimination. 

Employment practice liability provides coverage for legal defense expenses due to any possible lawsuits concerning employee rights within the organisation. It also covers compensation for damages awarded in either court settlements or judgments given during litigation proceedings. 

 Volunteer Coverage 

Volunteers who become injured while working for your charity will not typically have access to workers’ compensation insurance like paid employees would. However, many insurers offer protection specifically for volunteers. If anything does occur while volunteers are helping at specific events then at least there’s some form of safety net, should it be necessary. 

By offering this kind of coverage, insurance companies can provide a layer of protection against financial losses if an accident or injury does occur. Also, Volunteer Coverage helps to ensure volunteers feel comfortable and supported when taking part in charitable activities as they know they will be financially protected. 

Vulnerability to Cyber Breaches

Charities face the same cyber security threats that governments and large corporations do. However, these companies don’t have the proper means to deal with the technical and financial consequences of a cyber breach. 

A non-profit organisation must have liability insurance in place that will cover expenses related to cyber-attacks. The policy will pay for expenses for legal defenses and damages for individuals whose private information was compromised.

Protecting Board Members 

Often Directors’ and Officers’ insurance is overlooked when searching for non-profit insurance. It’s important to protect your board of directors because they can be sued should something go wrong in your organisation. 

Charities rarely have the finances to cover their own needs. So, if the board of directors face legal action they will need to pay the costs. Directors’ and Officers’ insurance can cover compensation and defense costs.  

Other Ways Charities Can Cover Costs

Fundraising Campaigns

Charities can organise fundraising campaigns to cover their costs through crowdfunding or peer-to-peer initiatives. Research into potential donors can help a charity target the right people and ensure more donations come in to cover their expenses.

Grants and Sponsorships

Charities can approach government agencies, non-profits, corporations, and other organisations for grants and sponsorships. These funds are usually allocated for specific projects and charities must provide ample evidence of their work to demonstrate how these resources will be used.

Donor Loyalty Programs

By launching loyalty programs, charities can encourage existing donors to remain loyal. These loyalty programs can appeal to new donors who may be attracted by incentives such as discounts or early access to upcoming events.

Commercial Lending 

With commercial lending you have an excellent way to fund special events or projects. Many banks and other financial institutions offer commercial loans specifically designed to meet the needs of non-profits. The loans may have terms and interest rates that are more favourable than those offered to traditional businesses. 

Such loans may provide funds for everything from event planning and marketing to improvements in facilities or purchasing equipment needed for an event.

Final Thoughts

Charity insurance provides essential cover and liability protection for organisations that rely on donations and support from the public. By investing in charity insurance, organisations can rest assured that they are adequately protected financially in case of any damage, injury, or legal action made against them. 

Every charitable organisation should take the time to evaluate whether or not acquiring charity insurance is the best option for them. The right insurance policy could save them a lot of trouble and money down the line.

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