Insurance for not for profit organisations: Comprehensive coverage essentials for UK nonprofits

Insurance for not for profit organisations is essential to protect UK charities, voluntary groups, and community organisations from financial risks, legal liabilities, and operational disruptions in 2025. Whether you run a small community initiative or manage a large national charity, the reality is the same: accidents happen, claims arise, and without proper insurance, your organisation’s […]

Many trustees and nonprofit leaders underestimate how vulnerable their organisations are to unexpected events. A single injury at a fundraising event, a cyber attack exposing donor data, or damage to rented property can lead to costly legal claims and financial strain. Insurance isn’t just a formality — it’s a strategic shield that allows nonprofits to operate with confidence while meeting legal obligations, such as employers’ liability cover for staff and volunteers.

This comprehensive guide will walk you through the key types of insurance for not for profit organisations in the UK, from public liability insurance and trustee liability insurance to cyber cover and professional indemnity. You’ll learn what’s legally required, what’s strongly recommended, and how to choose affordable, reliable coverage tailored to your organisation’s activities.

At NGO Finance Hub, we support UK nonprofits through expert ngo financial management, ngo finance courses, and financial management for NGOs training, helping organisations align their financial strategies — including insurance — with long-term sustainability and compliance.

Public liability insurance for nonprofits in the UK

Public liability insurance for nonprofits is one of the most critical and widely used policies in the charity sector. It protects organisations against claims made by members of the public for injury or property damage arising from their activities. Whether you’re organising a fundraising dinner, hosting a community event, or simply welcoming visitors to your office, public liability insurance offers financial protection if something goes wrong.

What does public liability insurance cover for nonprofit events and activities?

Public liability insurance typically covers:

Accidental injury to members of the public, event participants, or visitors
Damage to third-party property, such as rented venues, equipment, or vehicles
Legal fees and compensation costs associated with defending or settling claims

For example, if someone slips and breaks their arm at your charity’s fundraising gala, public liability insurance can cover the medical and legal costs that might otherwise fall on your organisation. Similarly, if a volunteer accidentally damages a community hall during setup, the insurance can pay for repairs.

Advantages of insurance for not for profit organisations

Many venues, local authorities, and grant funders require evidence of public liability insurance before allowing nonprofits to host events or access funding. It demonstrates that your organisation is operating responsibly and is prepared to handle potential claims.

Without this coverage, your charity could face significant out-of-pocket expenses, damaging both your finances and your reputation. Even small community groups should consider this policy essential, as claims can arise unexpectedly even from minor incidents.

How to choose the right level of cover

The level of cover required depends on the scale and nature of your activities. A local community group hosting occasional events might need coverage starting at £1 million, whereas larger charities running frequent public programmes may require £5–10 million. When comparing insurance providers, consider:

The number and size of public events you run
Whether you use third-party venues
The type of activities involved (e.g., sports, food service, large gatherings)
Legal or contractual requirements from funders or councils

Specialist nonprofit insurers can offer policies tailored to these unique needs. Combining public liability cover with other policies — such as trustee liability and employers’ liability — ensures more comprehensive protection.

Trustee liability insurance for UK charities and nonprofits

Trustees and board members play a vital role in guiding the strategy and governance of a charity. But with that responsibility comes legal accountability. Trustee liability insurance—also known as trustees’ and management liability insurance—protects individuals in leadership positions from personal financial risk if they are held liable for wrongful acts, mismanagement, or breaches of duty in their role.

Why trustee liability insurance is essential for charity trustees

Trustees are legally responsible for ensuring that a not-for-profit organisation complies with charity law, financial regulations, and governance standards. If something goes wrong—whether due to an error, oversight, or allegation—trustees can face legal claims personally. This may include claims from:

Regulators (e.g., Charity Commission investigations)
Employees or volunteers (e.g., discrimination or wrongful dismissal claims)
Third parties or beneficiaries (e.g., negligence in service delivery)
Other trustees or stakeholders (e.g., internal disputes or mismanagement claims)

For example, if trustees fail to file accounts properly or authorise expenditure that violates charity objectives, they could be personally named in legal proceedings. Trustee liability insurance provides legal defence costs and compensation coverage to protect them.

What does trustee liability insurance cover?

Typical coverage includes:

Legal defence costs for trustees facing investigations or legal action
Damages or compensation payments arising from claims of negligence, breach of trust, or mismanagement
Regulatory investigations, including Charity Commission or HMRC actions
Employment-related claims against trustees or senior managers

This type of insurance does not cover deliberate illegal acts or fraudulent behaviour, but it offers crucial protection against honest mistakes, poor advice, or complex regulatory issues.

Legal and governance expectations in the UK

The Charity Commission expects trustees to exercise their duties with care and diligence. While trustee liability insurance is not legally required, it is strongly recommended—particularly for medium and large charities, CICs, and organisations managing significant funds, assets, or staff.

Many grant-making bodies and institutional funders also look favourably on charities that maintain trustee liability cover, as it demonstrates robust governance and risk management practices.

Choosing appropriate cover levels

The appropriate cover amount depends on factors like:

The size and income of the organisation
Number of trustees and senior leaders
Complexity of operations and regulatory exposure
Whether the charity has trading subsidiaries or engages in commercial activities

Policies typically offer cover ranging from £250,000 to £5 million, depending on your organisation’s risk profile. Specialist nonprofit insurance providers often tailor trustee liability policies to suit the charity’s legal structure and governance arrangements.

Employers’ liability insurance for charities and nonprofits in the UK

When a not-for-profit organisation employs staff or engages volunteers, employers’ liability insurance becomes a crucial part of its protection strategy. In fact, for most UK charities, this type of insurance isn’t just recommended — it’s a legal requirement under the Employers’ Liability (Compulsory Insurance) Act 1969.

Is employers’ liability insurance mandatory for nonprofits?

Yes. If your charity employs paid staff, UK law requires you to have employers’ liability insurance worth at least £5 million from an authorised insurer. This applies regardless of whether employees are part-time, full-time, or temporary.

The policy provides financial protection if an employee or volunteer becomes ill or injured as a result of their work and makes a claim against the organisation. Without this cover, charities could face unlimited compensation costs, legal fees, and fines of up to £2,500 per day for each day they are uninsured.

Do volunteers count as employees?

While the law doesn’t explicitly classify volunteers as employees, many insurers recommend extending employers’ liability cover to include volunteers, trustees, and even temporary workers. This is because:

Volunteers can still be injured while carrying out their roles.
Claims could still be brought under common law duty of care, even if not under employment law.
Extending cover avoids costly legal disputes about who qualifies as an “employee.”

For this reason, most insurers include volunteers in employers’ liability policies for charities at no extra cost, ensuring comprehensive protection for the organisation.

What does employers’ liability insurance cover?

Typical policies cover:

Compensation costs for injury or illness sustained at work.
Legal defence costs if the organisation faces claims from staff or volunteers.
Medical expenses related to workplace incidents.
Court awards and settlements resulting from negligence claims.

For example, if a volunteer is injured while setting up for a community fundraising event, the policy would cover medical and legal costs if they pursue a claim.

Why this insurance matters for nonprofits

Charities often operate in environments where volunteers and employees work closely together — from charity shops and offices to public events and community centres. Employers’ liability insurance ensures the organisation can respond to accidents or illnesses without draining its operational budget or reserves.

Moreover, holding valid employers’ liability insurance demonstrates to regulators, funders, and the public that your charity takes its duty of care seriously. It is also a standard expectation during Charity Commission reviews, health and safety inspections, and grant funding assessments.

Key compliance tip

Once a policy is purchased, the organisation must display the insurance certificate (physically or digitally) and keep records for at least 40 years. HMRC and the Health and Safety Executive (HSE) may request proof during inspections or investigations.

Property and contents insurance for UK not for profit organisations

For many UK charities, community groups, and voluntary organisations, property and contents insurance is a cornerstone of risk management. Whether you own a charity shop, rent an office, or operate out of a community centre, protecting your physical assets is essential to avoid devastating financial losses.

Advantages of property insurance for charities

Not-for-profit organisations often rely on donated goods, volunteer-maintained spaces, or leased properties to deliver their services. These environments are vulnerable to risks such as:

Fire, flooding, and natural disasters
Theft or vandalism of equipment, stock, or furniture
Accidental damage to premises during events or operations

Without adequate insurance, even a single incident — like a burst pipe or a break-in — can wipe out years of hard-earned resources and disrupt critical services to beneficiaries. Property insurance provides the financial protection needed to repair or replace damaged assets quickly.

What property and contents insurance typically covers

Most nonprofit insurance policies include some form of property protection. Key elements usually covered are:

Buildings cover – For owned or leased premises, covering repair or rebuild costs following events like fire, storm damage, or vandalism.
Contents cover – For equipment, furniture, IT devices, documents, and donated goods kept on-site.
Stock cover – Essential for charity shops, food banks, or fundraising stores.
Business interruption – Covers lost income or increased operating costs if your charity cannot function due to property damage.

For example, if a community centre is forced to close temporarily due to storm damage, business interruption cover can help fund temporary facilities so services continue with minimal disruption.

Portable equipment and off-site protection

Many community and voluntary groups rely on portable equipment, such as laptops, tablets, PA systems, or event materials that move between venues. Standard property insurance may not cover items once they leave the insured location.

In these cases, adding portable equipment insurance ensures coverage for items taken off-site — whether they’re stolen from a car during transport or damaged while setting up for a fundraiser. This is particularly important for outreach programmes, mobile clinics, or groups hosting regular events in different locations.

Special considerations for rented properties

If your charity rents or leases space, check the lease agreement carefully. Often, landlords insure the building itself, but contents and tenant improvements remain the responsibility of the organisation. Additionally, some leases require tenants to have specific levels of liability insurance to cover damage caused to the property.

Balancing coverage and affordability

Property insurance premiums depend on factors such as property value, security measures, location, and type of activities carried out. Charities can often reduce premiums by:

Installing alarm systems and CCTV
Keeping accurate inventories of contents and stock
Regularly maintaining facilities to reduce risk
Bundling property insurance with other covers (such as public liability) through specialist nonprofit insurers

Professional indemnity insurance for not for profit organisations

For many UK charities and voluntary organisations, professional indemnity insurance is a critical but often overlooked safeguard. If your nonprofit gives advice, delivers specialist services, or works with vulnerable groups, you could face legal claims if a beneficiary, funder, or partner alleges that your organisation provided negligent, incorrect, or inadequate advice or services.

What professional indemnity insurance covers

Professional indemnity (PI) insurance protects not for profit organisations against the financial consequences of claims arising from professional errors. Typical coverage includes:

Legal defence costs for defending claims of professional negligence or errors.
Compensation payments if your organisation is found liable.
Costs of correcting mistakes, such as reprinting materials or redoing services.
Breach of confidentiality, defamation, or intellectual property infringement claims.

For example, imagine a charity provides financial advice to low-income families. If that advice leads to financial loss and a beneficiary decides to sue, professional indemnity insurance covers legal expenses and potential settlements, ensuring the organisation’s core funds remain protected.

When nonprofits need professional indemnity insurance

PI insurance is especially important for charities and CICs that:

Offer advice or consultancy services, such as legal, medical, educational, or financial guidance.
Run training programmes or publish guidance materials used by third parties.
Deliver commissioned projects funded by government agencies, local councils, or grant bodies, where contractual obligations apply.
Collaborate with corporate partners, where contracts may require PI insurance as standard.

In many funding agreements, professional indemnity cover is mandatory, particularly for organisations receiving government grants or delivering public services.

Common scenarios covered by PI claims

Professional indemnity claims can arise from various everyday situations in the nonprofit sector, including:

Incorrect advice – A beneficiary relies on faulty legal or financial guidance.
Omissions or errors – Failing to disclose key information in a report.
Breach of confidentiality – Accidentally sharing sensitive data.
Defamation – Publishing inaccurate information in promotional material.
Contractual disputes – A funder claims services were not delivered as agreed.

Even if the claim is unfounded, the cost of defending legal action can be financially devastating for a charity without PI cover.

How professional indemnity differs from public liability

While public liability insurance covers physical harm to people or property (e.g., slips and trips at events), professional indemnity covers advice-based or service-related risks. Many organisations hold both, as they address different exposures.

Choosing the right PI policy for nonprofits

When selecting a policy, trustees and finance managers should consider:

The scope of services offered — ensure all advice-based activities are covered.
Contractual requirements — check grant and service delivery agreements.
Limit of indemnity — typically ranges from £250,000 to several million pounds, depending on risk exposure.
Retroactive cover — protects against claims arising from past work.

Specialist insurance providers for UK not for profits can tailor PI policies to match the organisation’s activities and budget.

Cyber insurance for nonprofits in the UK

In 2025, UK charities and not for profit organisations are more reliant than ever on digital tools — from online fundraising platforms to volunteer management systems and cloud-based accounting software. With this digital expansion comes heightened exposure to cyber risks, making cyber insurance for nonprofits an increasingly essential component of modern risk management.

Why cyber insurance matters for charities

Charities are frequent targets of cyberattacks because they often store sensitive personal data, handle donations online, and may lack the sophisticated IT security infrastructure of large corporations. According to the UK Government’s Cyber Security Breaches Survey, nearly one in three charities reported a cyber incident in the past 12 months.

Common threats include:

Phishing attacks targeting staff and volunteers.
Ransomware that locks access to critical systems.
Data breaches exposing personal donor or beneficiary information.
Website defacement or payment fraud on donation platforms.

These incidents don’t just cause operational disruption — they can lead to fines from the Information Commissioner’s Office (ICO), legal liabilities, reputational damage, and loss of donor trust.

What cyber insurance typically covers

Cyber insurance policies for UK nonprofits usually include protection against both first-party losses (direct costs to the organisation) and third-party liabilities (claims made by others). Coverage often includes:

Incident response costs, including forensic investigation and data recovery.
Legal expenses related to GDPR breaches and regulatory investigations.
Notification and credit monitoring for affected individuals.
Business interruption costs from system downtime.
Cyber extortion and ransomware payments (subject to legal restrictions).
Third-party claims from donors, beneficiaries, or partners affected by the breach.

For example, if a charity’s donor database is hacked and personal data is stolen, the policy can cover investigation, ICO reporting obligations, legal defence costs, and even PR support to manage reputational fallout.

Cyber insurance and regulatory compliance

Under the UK GDPR and Data Protection Act 2018, charities have strict legal obligations to protect personal data. Cyber insurance doesn’t replace compliance, but it provides a financial safety net when incidents occur. Having coverage in place also demonstrates to funders and regulators that the organisation takes data protection seriously.

Who needs cyber insurance?

Any nonprofit that stores sensitive data, processes online payments, or relies on cloud systems should strongly consider cyber insurance. This includes:

Charities managing donor and beneficiary databases.
Community groups accepting online event registrations or donations.
CICs delivering services through digital platforms.
Nonprofits using cloud-based accounting and CRM systems.

Even small organisations are vulnerable — in fact, hackers often target them precisely because their defences are weaker.

Best practices to complement insurance

Cyber insurance is most effective when paired with robust cybersecurity practices, such as:

Staff and volunteer training on phishing and password security.
Multi-factor authentication on all systems.
Regular data backups and secure storage protocols.
Annual cybersecurity risk assessments.
Appointing a data protection lead or DPO.

Some insurers offer discounted premiums for organisations that implement these security measures.

Legal expenses insurance for UK not for profit organisations

Running a charity or community organisation in the UK involves navigating a complex landscape of employment law, contractual obligations, regulatory compliance, and governance responsibilities. Even with the best intentions, disputes can arise — and the legal costs of defending your organisation can quickly become overwhelming. This is where legal expenses insurance plays a vital role for not for profit organisations.

What legal expenses insurance covers

Legal expenses insurance provides financial protection to cover legal fees, court costs, and representation expenses when your organisation faces certain types of disputes or legal action. Typical cover includes:

Employment disputes — such as claims for unfair dismissal, discrimination, or breach of contract from staff or volunteers.
Contract disputes — arising from service delivery agreements, supplier contracts, or partnership arrangements.
Tax protection — covering legal fees for defending HMRC tax investigations or compliance checks.
Regulatory investigations — including Charity Commission inquiries or data protection investigations by the ICO.
Criminal defence costs — for trustees or staff wrongly accused of offences related to their role.

For example, if a former employee brings a claim for constructive dismissal, legal expenses insurance can cover solicitor fees, representation at an employment tribunal, and potential settlement negotiations.

Why legal cover matters for charities and community groups

Not-for-profit organisations often operate with limited financial reserves. A single legal dispute — even if the organisation is ultimately found not at fault — can cost tens of thousands of pounds in legal fees. Legal expenses insurance ensures that unexpected legal challenges don’t divert essential funds away from charitable activities or community services.

It also provides peace of mind for trustees, who carry personal legal responsibilities. Many trustees are volunteers, and knowing that legal support is in place can encourage experienced professionals to join boards without fear of personal exposure.

Legal expenses vs trustee liability insurance

While trustee liability insurance protects trustees personally against claims of mismanagement, legal expenses insurance covers the organisation’s legal costs when facing disputes. Both are complementary:

Trustee liability = financial protection for individuals.
Legal expenses = financial protection for the organisation’s legal defence.

Most comprehensive nonprofit insurance packages include both types of cover to ensure holistic protection.

Choosing a suitable legal expenses policy

When selecting legal cover, charities should:

Review policy limits to ensure they match the organisation’s size and risk exposure.
Check which types of disputes are covered — some policies exclude contractual disputes or cap tribunal costs.
Confirm whether regulatory investigations are included, as these are increasingly common in the charity sector.
Work with a specialist insurer for UK nonprofits to tailor coverage to their legal and operational environment.

Risk management and choosing insurance providers for UK not for profit organisations

Insurance is just one part of a broader risk management strategy for charities and community organisations. To make informed coverage decisions and keep premiums affordable, UK nonprofits must combine robust internal controls with careful selection of specialist insurance providers who understand the sector.

Integrating risk management into nonprofit operations

Risk management involves identifying, assessing, and mitigating potential threats to your organisation’s people, property, finances, and reputation. For charities, this means going beyond basic cover to build a culture of prevention and preparedness. Key steps include:

Risk assessments – Regularly evaluate operational risks, such as health and safety hazards, financial controls, data protection, and governance issues.
Policies and procedures – Document protocols for incident reporting, safeguarding, volunteer management, and data handling.
Training – Provide staff and volunteers with clear guidance on risk prevention, from cybersecurity awareness to first aid training.
Incident reporting systems – Ensure there are clear channels for reporting near misses, accidents, or breaches.
Annual reviews – Revisit insurance policies and risk registers annually to adapt to new activities, legal changes, or funding models.

A well-structured risk management approach can reduce the frequency and severity of claims, which not only protects the organisation but can also lead to lower insurance premiums.

Choosing the right insurance provider for nonprofits

Selecting a suitable insurer or broker is crucial. Not all commercial insurers understand the unique legal structures, funding models, and liabilities of UK charities. When choosing a provider, consider:

Sector expertise – Work with insurers or brokers that specialise in charities, CICs, and voluntary groups. They offer tailored policies and understand Charity Commission and HMRC compliance.
Policy flexibility – Nonprofits evolve; your insurance needs may change with new services, locations, or staff. Look for policies that can be easily adjusted.
Claims support – Check how responsive the provider is when handling claims. Timely, supportive service during incidents is invaluable.
Bundled cover options – Many providers offer packages combining public liability, trustee liability, cyber insurance, and property cover, often at lower overall cost.
Regulatory compliance – Ensure the provider is authorised by the Financial Conduct Authority (FCA) and experienced in UK charity insurance regulations.

Working with brokers vs direct insurers

Many charities prefer to use independent brokers rather than going directly to insurers. Brokers:

Compare multiple policies to find the best fit.
Help interpret policy wording and exclusions.
Provide advice on claims management and renewals.

For smaller organisations, this can be particularly beneficial, as brokers often have access to nonprofit-specific insurance packages that may not be widely advertised.

Balancing coverage with affordability

Budget constraints are a reality for most not for profit organisations. However, choosing the cheapest policy can leave critical gaps in protection. A smarter strategy is to:

Prioritise essential covers first (e.g., public liability, employers’ liability).
Add additional covers like cyber or PI insurance based on actual exposure.
Implement good risk management practices to negotiate lower premiums.
Explore group insurance schemes via membership bodies such as NCVO or Association of Charitable Organisations.

The goal is not to over-insure, but to create a balanced, cost-effective insurance portfolio that aligns with your organisation’s real-world risks.

Protecting your mission through the right insurance strategy

For UK charities and community groups, insurance for not for profit organisations is not just a regulatory requirement — it’s a strategic investment in safeguarding your mission, people, and resources. In an increasingly complex operational landscape, risks can arise from many directions: public events, staff and volunteer activities, digital platforms, property damage, or legal disputes.

By securing the right combination of public liability, trustee liability, employers’ liability, property and contents, professional indemnity, cyber insurance, and legal expenses cover, nonprofits can protect themselves against unexpected financial shocks while maintaining donor and public trust.

At the same time, strong risk management practices and working with specialist insurance providers for UK nonprofits ensure that coverage is both effective and cost-efficient. This balanced approach empowers organisations to focus their energy and funds on what truly matters — delivering social impact.

At NGO Finance Hub, we understand the unique financial and operational challenges facing UK charities, CICs, and voluntary organisations. Our team provides expert guidance on ngo financial management, compliance support, and capacity-building through our NGO finance courses and financial management for NGOs training. We help organisations structure their insurance strategies alongside their financial planning — ensuring long-term sustainability and regulatory peace of mind.

Whether you’re a small community group or a national charity, taking the time to review and strengthen your insurance coverage today can make the difference between a temporary setback and a lasting crisis tomorrow.

Visit ngofinancehub.com to access resources, training, and expert advice tailored to your nonprofit’s financial and risk management needs.