DRAFT Introduction
Taking out insurance to protect ourselves from financial risk is part of everyday life. It is very likely you will have some experience of taking out insurance for either yourself or your family, whether travel insurance for a holiday, insurance for your car or insurance for the contents of your home.
Many different types of insurance exist, not just for individuals, but also for voluntary and community groups and organisations. The Charity Commission for England and Wales, the Office of the Scottish Charity Regulator and the Northern Ireland Department for Social Development all expect the trustees of an organisation to ensure adequate insurance is in place, but it can be difficult to know what forms of insurance are necessary and
appropriate. The type of insurance a group needs will depend on whether they employ people and whether they use, or own, a building, vehicles and equipment.
This guide explains some of the insurance types available and aims to help groups decide what kind of insurance cover to take out. It is only intended as an introduction and any parent support group considering taking out an insurance policy should always speak to an insurance broker or seek professional advice (from page 8 onwards), to identify the most appropriate forms of cover.
Further help
Local Infrastructure Organisations (like Councils for Voluntary Action, or Councils for Voluntary Service) will also be able to give you more information and advise you on insurance issues. To find your nearest local infrastructure organisation contact NAVCA (the National Association for Voluntary and Community Action) on 0114 278 6636 or visit their website at: http://www.navca.org.uk.
The Charity Commission leaflet CC49 – Charities and insurance gives more information about the most common types of insurance and the factors to consider when buying insurance policies. Copies of the leaflet can be downloaded from the Charity Commission website at: http://www.charitycommission.gov.uk/publications/cc49.asp.
(Note: This leaflet refers to The Charities Act which applies in England and Wales only.)
Insurance for parent
support groups
First steps
Before you take out an insurance policy, draw up a list of all your group’s activities and think about all the risks involved. This will not only help you to minimise these risks but also enable you to identify the most appropriate forms of cover for your group.
It is possible to insure your group against almost every conceivable risk but before spending valuable funds on insurance cover, your group might like to consider the following questions:
1. Is the insurance a legal requirement? (See below for more information about this.) 2. If the insurance is not required by law, is it going to be worth the cost? Does your
group’s experience, or that of similar groups, suggest that taking out this particular type of insurance would be worth the money?
3. Could your group’s activities be adapted to eliminate the risk, or reduce it to a level where the insurance would not have to be taken out?
4. Should your group abandon the activity that gives rise to the risk altogether? What the law says
There are two types of insurance that all community groups and organisations must take out by law:
1. Employers’ liability insurance
If your group employs staff or pays people on a regular basis, then you must take out employers’ liability insurance. This insurance will cover your group against injury, illness or death to an employee that occurs as a result of the group’s negligence (like a breach of health and safety legislation or neglect).
Your employers’ liability insurance must cover your group for a minimum of £5 million. You must also make sure the insurance certificate is displayed in a prominent place and retain the certificate for 40 years.
There are some circumstances where your group might not have to take out this insurance, for example, if you do not deduct income tax or national insurance from the money you pay people (i.e. they are self-employed), or if they do not work exclusively for your group. However, it is always best to double-check where you stand by calling the Health and Safety Executive helpline on 0845 345 0055 or go to
www.direct.gov.uk/en/Employment/HealthAndSafetyAtWork/index.htm.
2. Road traffic insurance
If your group uses a vehicle as part of your main activities, then you must take out road traffic insurance to cover at least the death or injury of other road users or pedestrians. Although there is no legal obligation to extend the policy to third party, fire and theft, it is advisable. Taking out a fully comprehensive policy is the ideal.
If your staff or volunteers use their own vehicles to carry out the business of the group, they must ensure that their own insurance covers them for business use. It is good practice to make sure that your staff and volunteers have insured their vehicles for this purpose.
If your group runs a minibus seating 9-16 passengers, or a vehicle larger than this, you need to contact the Community Transport Association for more advice – their contact details can be found on page 10.
Other types of insurance cover
Public liability (also known as Third Party Insurance)
Public liability insurance will cover your group against any claims made for loss, injury or damage caused to any person or property as a result of your negligence or failure to take reasonable care. This will usually include the actions (or the lack of action) of all paid staff, management committee members and other volunteers. However, always check your policy carefully to make sure everyone is covered.
Although this kind of insurance is not compulsory, it is highly recommended for any group providing services or activities to members of the public. If your group is planning on renting premises for your activities, taking out public liability insurance is often one of the terms of the lease. Some funders might also insist that you have public liability insurance in place.
If your group hires rooms or other external venues for meetings, conferences or family days, it is good practice to check that they have public liability insurance in place. Your group may well be covered on their insurance otherwise the venue may expect your group to have your own insurance in addition as it might be a condition of hiring their facilities.
Contents insurance
You can insure your group’s property against loss or damage just as you can the contents of your home. The most appropriate type of contents cover will vary depending on your group’s circumstances, but at the very least the furniture, books, play equipment,
stationery and computers kept at your group’s premises should be covered. You can also extend your policy to cover your group’s property when it is used away from your main
base. This is known as all risks insurance and may also offer cover against accidental damage and breakdown of equipment.
It is important to let your insurer know if your volunteers have access to your equipment and if your premises and equipment are shared with other groups and organisations, as this might affect the premium you pay.
If your group rents or hires premises, check with the owner of the building the extent to which your group’s property is covered by their insurance policies. Ask them to put this in writing. If you are happy with the level of cover, you may decide not take out your own contents insurance.
Building insurance
If your group has purchased its own premises this type of insurance is essential. Although taking out this insurance is not actually required by law, it is usually a requirement of a mortgage. You should make sure your insurance covers things like the costs of:
rebuilding clearing debris
broken windows
architects, surveyors and legal fees
temporary premises, renting equipment and anything else you would need to continue the group’s activities (like computers, photocopiers, telephones), should you need to leave your permanent premises.
If your group rents your premises, then you need to check the terms of your lease to see whether you are responsible for taking out buildings insurance or whether it is down to your landlord. Usually it will be the landlord who is responsible (and often the costs involved are passed to the tenant through charges) but the responsibility is sometimes transferred to tenants who have a long-term lease.
When taking out buildings and contents insurance, you need to decide whether you would like:
• Reinstatement cover which will replace old with new; or
• Indemnity cover which will bring you back to the position you were in immediately before your claim.
Professional liability insurance
If your group offers an advisory service to members of the public, it is a very good idea to take out this type of insurance, even if your service is free. If your staff members or volunteers give incorrect advice to a member of the public, this insurance will cover your group against any loss, damage or injury that might occur as a result, for example, if incorrect advice is given about benefits.
Trustee indemnity insurance
Your group’s trustees can be held personally liable for any debts and losses your group faces as a result of mistakes they have made. If trustees have made honest mistakes in managing your group, trustee indemnity insurance protects them against any claims.
The Charities Act 2006 allows trustees to purchase this insurance with the group’s funds without seeking permission from the Charity Commission (as used to be the case). However, trustees can only do this as long as there is no clause in the charity’s constitution forbidding it.
(Note: The Charities Act applies in England and Wales only.)
Insurance for fundraising events
If organising a fundraising event, like a summer fete or gala, then your group can take out cover against losses that may arise as a result of bad weather. It is a good idea to seek professional advice about this because there are usually strict time limits and
arrangements for measuring rainfall levels. These policies are often expensive so
depending on the scale of the event, and the amount your group hopes to raise, it might not be cost effective to take out this type of insurance.
Buying your insurance
Once you know the type (or types) of insurance you require, you need to find the best deal for your group. It can often be cheaper and easier to arrange all your insurance through a reputable broker who can find policies that best meet your group’s needs. Talk to other local organisations and groups to see who they are insured with and whether they can recommend a particular broker or insurance company. A list of insurance brokers who specialise in arranging insurance for voluntary and community groups can be found on page 8.
If you can, it is really worth getting quotes from more than one broker or insurance provider.
Key questions
Can you pay your insurance premiums monthly or quarterly rather than annually? Can you get a better deal if you have a long-term agreement?
Are there any no claims discounts?
Is a combined package available? This will cover a number of risks in one policy and could save your group some money as you won’t have to pay for a number of different policies.
Have you given all the relevant information you can think of? Any inaccuracies or omissions (even if they are unintentional) could mean the insurer disputes a claim or refuses to pay.
Are there any exclusions? There may be some statements in an insurance policy listing property or circumstances that it will not cover; these are known as
exclusions. Look at them carefully as it may mean it is not worth taking out that particular insurance and another company may be able to offer you something more appropriate.
Have you checked the small-print? Always check all the details, however tiny, for example, if you are taking out contents insurance, does your policy say you have to fit a specific standard of door and window locks on your group’s premises?
Is everything clear? If you don’t understand anything in an insurance quote or policy then ask for an explanation, otherwise your level of cover may not be appropriate or you might not be complying with the terms of your insurance agreement without realising, which will invalidate any claims you may need to make.
Have you valued your building and its contents accurately? If you underinsure the value of a building, or its contents, your insurance company will only pay out a proportion of any loss (arguing that the risk was larger than you declared) and your group will have to pay the balance. In some circumstances the insurance company may even refuse to pay.
Next steps
There are still things to think about once you have your insurance in place. Many groups find it helpful to ask one group (or committee) member to have special responsibility for insurance issues.
Insurance checklist
Always pay your insurance premiums on time.
Keep at least two copies of all the information the insurance company supplies. In case of fire or theft, keep one copy away from your group’s premises, in a place where it will be easy to find.
Every time your group buys new equipment or starts a new activity, check that you are still covered by your insurance policy. Let your insurer know about any major changes.
Review your insurance at least once a year and give yourself enough time to get alternative quotes.
Make sure you renew your insurance on time. Put a reminder in your group’s diary or planner.
If you need to make a claim, contact your insurance broker or company
immediately. You will need to complete a claim form as soon as you can – there may be a time limit for making a claim so check the deadline for sending the form back. If you are making a claim because of criminal activity, like a burglary, you must report this to the police. They will then give you a crime number which you will have to quote when making a claim.
Insurance brokers
Contact a Family cannot recommend or endorse an individual company or policy. However, here are a selection of the main insurance brokers specialising in arranging insurance for voluntary and community groups. Your nearest local infrastructure organisation may also be able to give you information about other companies. We recommend you always seek advice before taking out any policy.
Access Insurance
Telephone: 020 8651 7420
Email: [email protected] Website: www.accessinsurance.co.uk
Ansvar Insurance Company Limited Telephone: 01323 737541
Email: [email protected] Website: www.ansvar.co.uk
Address: Ansvar House, St. Leonards Road, Eastbourne, East Sussex BN21 3UR
CaSE Insurance
Telephone: 0845 225 2288
Email: [email protected] Website: www.caseinsurance.co.uk
Address: aQmen Ltd, James House, Emlyn Lane, Leatherhead, Surrey KT22 7EP
Endsleigh Insurance Services Telephone: 0800 028 3571
Email: [email protected]
Website: www.endsleigh-business.co.uk/charity-insurance.html
Address: Hadley House, Shurdington Road, Cheltenham, Gloucestershire GL51 4UE
Keegan and Pennykid Insurance Brokers Telephone: 0131 225 6005
Email: [email protected] Website: www.keegan-pennykid.com
Address: 50 Queen Street, Edinburgh EH2 3NS
Ladbrook Insurance Intermediary Telephone: 01909 565858
Email: [email protected] Website: www.ladbrook.co.uk
Address: 5A County House, Waterside Business Park, Rotherham Road, Dinnington,
Giles Insurance Brokers Telephone: 0121 200 4920
Email: [email protected]
Website: www.gilesinsurance.co.uk/cms/view/56
Address: Spectrum Building, 7th Floor, 55 Blythswood Street, Glasgow G2 7AT
Stuart Alexander (Bluefin) Telephone: 020 7338 0111
Website: www.stuartalexander.co.uk
Address: Fountain House, 130 Fenchurch St, London EC3M 5DJ
Useful organisations
Charity Commission for England and Wales Telephone: 0845 300 0218
Minicom: 0845 300 0219
Website: www.charity-commission.gov.uk
Address: Charity Commission Direct, PO Box 1227, Liverpool L69 3UG
Office of the Scottish Charity Regulator Telephone: 01382 220 446
Email: [email protected] Website: www.oscr.org.uk
Address: 2nd Floor, Quadrant House, 9 Riverside Drive, Dundee DD1 4NY
Northern Ireland Department for Social Development Telephone: 028 9082 9425
Website: www.dsdni.gov.uk/charities_advice
Address: Charities Branch - Voluntary and Community Unit, 3rd Floor, Lighthouse Building, 1 Cromac Place, Gasworks Business Park, Ormeau Road, Belfast
BT7 2JB
Community Transport Association Telephone: 0845 130 6195
Email: [email protected] Website: www.ctauk.org/
Address: Highbank, Halton Street, Hyde, Cheshire SK14 2NY
National Association for Voluntary and Community Action (NAVCA) Telephone: 0114 278 6636
Email: [email protected] Website www.navca.org.uk
Address: The Tower, 2 Furnival Square, Sheffield S1 4QL
Case studies
Case study 1 – FOCUS
FOCUS is a medium-sized organisation which started as a local parent support group. As well as offering weekly support group meetings, FOCUS now runs a summer playscheme for disabled children at a local children’s centre. They also organise day trips for the whole family during the school holidays.
A grant from a local trust enables FOCUS to employ a summer playscheme co-ordinator and two play workers. A successful fundraising appeal has also allowed them to purchase a 12-seater minibus. The minibus is used to transport parents to support group meetings and families wishing to attend day trips. The day trips are supervised by a team of
Insurance taken out by FOCUS Type of insurance Why? Employers liability
insurance
FOCUS employs a playscheme co-ordinator and two play workers – they are therefore legally obliged to take out this insurance and must be covered for a minimum of £5 million.
Road traffic insurance
FOCUS owns and runs a minibus and must have this type of insurance in place by law. The insurance must cover the death or injury of other road users and pedestrians as a minimum. FOCUS contacted the Community Transport Association for advice before purchasing any insurance for the minibus. The Community Transport Association also gave FOCUS details of their own insurance scheme, told them about their Minibus Driver Awareness Scheme and gave details of useful training taking place in their local area.
Public liability insurance
FOCUS runs weekly support group meetings. They want to be covered should one of their members make a claim because they have suffered loss, injury or damage to property, as a result of the group’s negligence at one of the meetings. This insurance also covers the group if any loss, injury or
damage occurs when members and their families are taking part in playscheme activities and day trips. This includes the actions or negligence of the volunteers who supervise the day trips.
Similarly, the volunteers themselves are covered by the policy if they suffer any loss, injury or damage to property as a result of the group’s negligence.
FOCUS made sure that their Public Liability Insurance Policy specifically mentioned volunteers before taking it out.
Case study 2 – The Thursday Group
The Thursday Group is a small parent-led support group. The group meets regularly for coffee and a chat each month in the local community hall which they hire for a small fee. The group also invites occasional speakers to meetings and has a book, video and DVD library for parents – the community hall allows them to store their library stock in one of their cupboards in between meetings. They also have plans to start a toy library.
Insurance taken out by the Thursday Group Type of insurance Why?
Public liability insurance
The Thursday Group is meeting regularly each month and wants to be covered should one of their members make a claim because they have suffered loss, injury or damage to property, as a result of the group’s negligence at one of the meetings.
This insurance will also cover the group if one of the visiting speakers suffers loss, injury or damage to property because of the group’s negligence.
Taking out this policy was a requirement of the community hall’s hiring agreement.
Contents insurance
The group’s book, video and DVD library would be costly to replace should it be stolen or damaged.
Although the group’s property was covered by the community hall’s contents insurance, this only applied while the property was on their premises. As members often borrow several library items at a time and take them home, the group decided to have its own policy which would cover items while away from the premises. This policy will be extended to include toys and play equipment, once the toy library is up and running.
This guide is part of the Contact a Family Group Action Pack.
For more information, please visit www.cafamily.org.uk or telephone 020 7608 8700. Although great care has been taken in the compilation and preparation of this guide to ensure accuracy, Contact a Family cannot take any responsibility for any errors or omissions.
