Charity insurance explained

What does it all mean?

Running a charity can be complicated, as can understanding all the different sections of insurance cover that make up a charity insurance policy. To help you, we've broken down each section of our charity insurance cover and given a brief explanation of what it is and why a charity might need it.

Business interruption

Business interruption covers a charity for any financial losses following interruption to the business caused by damage to property.

When damage occurs the loss is not limited to buildings and contents but may impact on income, or consequential losses, and could affect ability to trade. The purpose of Business interruption cover is to maintain the business during the indemnity period, so that the insured can resume trading at their pre-loss trading level once the damage has been repaired.

Employers' liability

Employers' liability covers the legal liability of employers arising out of injuries to employees and volunteers.

Employers' liability insurance enables the insured to meet the cost of compensation for employees' or volunteers injuries or illness caused by the insured's negligence. If a charity employs staff it is considered an employer under the law and under the Employers' Liability (Compulsory Insurance) Regulations 1998, all employers are required to take out EL cover with a minimum cover of £5 million.


Fidelity insurance protects against employee theft.

Fidelity insurance reimburses the insured for a loss of money directly resulting from dishonest acts of their employees or volunteers. Fidelity insurance protects businesses from costs incurred as a result of forgery, defalcation, embezzlement and other fraudulent acts by employees or volunteers.

Goods in transit

Goods in transit insurance protects property against loss or damage while the goods are in transit from one place to another.

Goods in transit covers damage to a charity's property which is in transit by any road vehicle operated by the charity, or a vehicle operated by road hauliers, parcel service or rail, in connection with the charity and its activities. It also cover damage to drivers’ clothing and personal effects up to an amount of £500 per person.

Legal expenses

Legal expenses incurred by a charity.

The costs of defending a charity or social enterprise in a legal proceeding, such as an employment or other HR dispute, can be considerable. This cover can help to protect the charity against legal costs and compensation awards, which may arise if the charity has to bring or defend legal proceedings.


Loss of money cover.

We will pay for physical loss of money and damage caused by theft or attempted theft to any safe or strongroom at a charity's premises or cash carrying case, security belt or waistcoat; damage to clothing and personal effects belonging to an employee or volunteer caused by theft or attempted theft of money.

Personal accident

Personal accident insurance provides a benefit payment in the event of injuries, disability or death.

Cover if a member of the charity including directors or employees whilst working or volunteering for the charity, sustains accidental bodily injury caused by external violent and visible means.

Professional indemnity

Professional indemnity insurance provides cover for claims due to professional negligence.

If a charity provides a professional service, such as counselling, or any form of advice or information, the charity may be held liable if the service, advice or information was provided negligently. Professional indemnity insurance will provide indemnity against such incidents, but we would need to be made aware of all the different advice and services provided, this also applies on an on-going basis should activities change at any point.

Property damage

Property damage liability insurance covers the cost of damages to someone else's property after an accident caused by the charity.

Most commonly, property damage will pay out when the insured is at fault for an accident that causes damage to someone else's property.

Public and products liability

Public and products liability for injury to the public or damage to their property.

Public and products liability cover protects against legal liability to pay compensation to anyone who is injured, or whose property is damaged, as a result of the insured's actions.

Trustees' & directors' indemnity

Trustee indemnity insurance provides cover which protects trustees from having to personally pay out legal claims against them that arise from negligence or a breach of trust or duty.

Trustees in a charity are required to follow certain duties laid out by law. Trustees' and directors' indemnity insurance provides cover which protects trustees from having to personally pay out claims against them that arise from negligence, or a breach of trust or duty. It can also cover the charity for corporate liabilities that arise from a trustee’s breach of duty or negligence. However, this will not cover costs related to a criminal fine or penalty, or costs from the trustee being convicted of fraud, dishonesty or a reckless or deliberate act.