Charity insurance

The essentials for UK charities in 2025

Charity insurance protects your organisation against financial losses linked to your activities, people, premises, and governance. In 2025, this protection matters more than ever. Charities across Great Britain face rising labour costs as employer National Insurance increases to 15%, with lower thresholds pushing up payroll bills. Sector data shows many charities already spend more than they earn, and a significant share fear closure without careful cost control. At the same time, the insurance market is softening, which can open the door to better terms if you approach the market well.

Your risks are varied. The sector employs over a million people and relies on millions of volunteers. That scale creates exposures ranging from public liability at events to safeguarding, data protection, and trustee decision making. Cybercrime now touches the majority of charities, yet preparedness levels remain low. Getting the insurance foundations right helps you keep services running when something goes wrong, so beneficiaries are protected and funders stay confident.

This guide explains the main types of charity insurance, how cover works, and the typical limitations to watch. We will also outline practical steps to compare policies, reduce costs, and navigate claims without surprises. The goal is to help you make a considered choice that balances adequate protection with tight budgets. No jargon, no assumptions, just clear guidance set against today’s operating reality.

Insurance can support resilience, but only when you match cover to your actual risks and budget.

What is covered and how claims work

Most charities start with a core package that can include public liability, employers’ liability, property cover for buildings and contents, business interruption, and trustee and management liability. Many add professional indemnity where advice, counselling, or signposting could lead to a claim. If you collect or store personal data, cyber insurance is increasingly relevant.

A public liability claim might arise if a member of the public trips at your event and suffers injury. Employers’ liability responds to staff injury or illness. Trustee liability protects individuals if alleged mismanagement leads to financial loss. Property and business interruption can help repair damage after a fire or flood and replace lost income while you cannot operate. Cyber insurance can cover incident response, data recovery, and liability following a breach.

Insurers expect you to manage risks sensibly. Policies can exclude deliberate acts, known issues not disclosed, activities outside stated operations, or inadequate safeguarding. For example, a youth charity running an unsupervised high-risk activity outside policy terms may find a claim declined. Claims usually follow a straightforward path: report the incident promptly, share documents and evidence, follow the insurer’s instructions, and avoid admitting liability. Excesses apply and some covers include inner limits, sub-limits, or waiting periods. Being transparent about activities, income sources, and volunteer roles at the outset helps avoid gaps.

Who benefits most from this cover

Charity insurance is designed for registered charities and not-for-profit organisations across GB, from small community groups to national service providers. It is particularly valuable where you interact with the public, run events, use premises, handle funds or personal data, employ staff, or rely on volunteers. Boards and trustees benefit from personal protection when taking complex decisions in a fast-changing funding environment.

Where activities are minimal, risks low, and no staff or volunteers are engaged, a very light package may be sufficient. Some micro-charities operating only online may focus on trustee liability and cyber rather than property. If you are dormant or handling only grant pass-throughs with no events, discuss with a specialist broker whether a reduced level of cover is appropriate. The aim is fit-for-purpose protection, not unnecessary expense.

Choosing a level of protection

1. Basic
   • Core public liability and employers’ liability (where legally required), with modest limits suited to small, low-risk activities. May include minimal contents cover for office equipment. Best for small community groups with limited events and no complex advice services.
2. Standard
   • Public and employers’ liability with higher limits, trustee and management liability, property and business interruption for owned or rented premises, plus event cover. Suitable for growing charities with volunteers, multiple venues, or regular fundraising activities.
3. Comprehensive
   • Standard package plus professional indemnity, cyber and data risks, fidelity/crime, abuse extensions subject to strict safeguarding conditions, and international travel cover if relevant. Designed for larger charities or those delivering regulated services.
4. Optional add-ons
   • Cyber incident response and social engineering cover for phishing and funds transfer fraud.
   • Extended event cancellation including adverse weather and non-appearance (subject to terms).
   • Equipment breakdown for servers, medical or catering equipment.
   • Legal expenses for employment disputes, contract issues, and tax investigations.
   • Motor fleet or community transport cover if you operate vehicles.

Use consistent limits and deductibles across quotes so you can compare like-for-like. Ask for wording summaries and key exclusions in writing before you decide.

Prices and what drives them

Typical premium ranges and cost drivers vary by size, activities, and claims history. Figures below are illustrative, not guarantees.

Premiums are also affected by increased labour and wage costs, which can change payroll-linked ratings. The market is softening in 2025, so negotiating broader cover or improved deductibles may be possible with a strong risk profile and clear documentation.

Eligibility and what insurers require

Most UK-registered charities and CIOs can apply, as can many community interest organisations and not-for-profits operating in GB. Insurers will ask for your governing documents, safeguarding policies, risk assessments, income breakdowns, payroll details, volunteer numbers, and a description of activities and events. Property details, sums insured, and security protections are essential where you insure buildings or contents.

Common decline reasons include undisclosed high-risk activities, inadequate safeguarding where working with children or vulnerable adults, poor financial controls, past criminal or regulatory issues, or a history of frequent or severe claims. If your work includes regulated advice, overseas projects, or medical services, expect additional questions and conditions. Being accurate, complete, and timely with information helps keep premiums fair and coverage robust.

From quote to claim in simple steps

1. Map activities, people, and assets to identify risks and required covers.
2. Gather documents: accounts, payroll, risk assessments, and safeguarding policies.
3. Get multiple quotes on a like-for-like basis via a specialist broker.
4. Compare limits, exclusions, deductibles, and inner limits line by line.
5. Choose a policy that fits budget and risk appetite, then purchase securely.
6. Implement risk controls, staff training, and incident response procedures.
7. Report incidents promptly, follow insurer guidance, and retain all evidence.
8. Review cover annually or after major changes in services or staffing.

Advantages and watch-outs

Key checks before you commit

Review policy schedules and wordings carefully. Confirm liability limits match venue and funder requirements. Check excesses for each section and whether any waiting periods apply to business interruption or cyber extortion. Look for inner limits on cash, portable equipment, and theft from unattended vehicles. Ensure safeguarding, data protection, and risk management conditions are achievable in practice, not just on paper. Ask how renewal pricing is assessed and what triggers mid-term adjustments if your income or activities change. Keep evidence of staff and volunteer training, especially for manual handling, lone working, and data security.

Alternatives and related protection

1. Event-only insurance - useful if you run occasional fundraisers and do not need year-round cover.
2. Professional indemnity - appropriate for advice-led services, counselling, or advocacy work.
3. Cyber-only cover - for micro-charities operating primarily online with minimal physical risks.
4. Community group cover - simplified packages for very small, low-risk local activities.
5. Motor fleet or community transport insurance - needed if you run minibuses or regular transport.
6. Health and safety consultancy - not insurance, but reduces incidents and supports defensible claims.

FAQs

Do we legally need employers’ liability insurance?

If you employ staff in the UK, employers’ liability is usually a legal requirement. Even if you rely mostly on volunteers, having employers’ liability can still be prudent. Check the definition of employee and volunteer in your policy wording.

Are volunteers covered by public or employers’ liability?

Policies vary. Some employers’ liability wordings include volunteers, while others extend public liability to volunteers. Confirm definitions and ensure activities and roles are declared. If in doubt, ask for the position in writing from your broker or insurer.

How do rising National Insurance costs affect premiums?

Higher payroll and wage costs can increase rates for covers linked to payroll, such as employers’ liability. They also pressure budgets overall. Offsetting measures include accurate risk data, training, and leveraging the softer 2025 market to negotiate terms.

What cyber protections should we have before buying cover?

Insurers commonly expect MFA on email, regular backups, staff phishing training, and prompt patching. Strong controls can reduce premiums and improve claim outcomes. Policies differ, so check whether funds transfer fraud and social engineering are included.

Can we reduce costs without weakening protection?

Yes. Remove irrelevant extensions, raise deductibles within your risk tolerance, invest in risk controls, and seek multi-year pricing commitments if available. Use a specialist broker to benchmark wordings and avoid paying for duplicated cover.

How much trustee liability cover do we need?

This depends on your income, activities, and board structure. Many charities choose limits aligned to income bands, but there is no one-size-fits-all. Consider potential legal defence costs and stakeholder expectations, then compare quotes at different limits.

What if we run activities across England, Scotland, and Wales?

UK charity policies commonly cover GB-wide operations, but notify insurers about each location, regional regulations, and any cross-border events. If you work in Northern Ireland or overseas, ask for explicit territorial extensions and any additional conditions.

What to do next

List your activities, people, premises, and data flows. Gather key documents and ask a specialist broker to obtain like-for-like quotes from multiple insurers. Compare limits, exclusions, and deductibles with care, then choose a policy that fits your risks and budget. Review annually and after any significant change.

Important note

This guide is general information, not personal financial advice. Policy terms, limits, and exclusions vary by insurer. Always read your schedule and wording carefully, and seek professional guidance to confirm suitability for your organisation.