What insurance is compulsory, and what is just sold to us?

England and Wales: This page sets out the position in full, with the Charity Commission’s own guidance. Scotland: covered — the same two policies are required by law, and trustees have the same power to buy cover for themselves; OSCR has no guidance of its own on this. Northern Ireland: covered — cover for staff is required under Northern Ireland’s own law, whose detail is not set out here; trustees have the same power to buy cover for themselves, and CCNI has no guidance of its own on this.

Legally required, contractually required, or a choice

Sort every policy into one of three columns: required by law, required by a contract, or a choice. Public liability insurance for charities, the cover most often asked about, is never in the first column.

The trustees and the treasurer build this schedule. If you have not yet met your health and safety duties, take that step alongside this one. The same first employee brings both. The Charity Commission’s guidance on it covers England and Wales. Employers’ liability and motor cover are required in all three nations.

This one split is what makes an insurance schedule useful. For each policy, ask which of three columns it belongs in.

Cover	Required by law?	Required by a contract?	Advisable?
Employers’ liability	Yes, if anyone works under a contract of service	—	Extending it to volunteers, in writing
Motor	Yes, if the charity owns or operates a vehicle on public roads	Check that staff and volunteers’ own policies cover charity business use	—
Public liability	No — there is no statutory minimum	Often required by venues, leases and event organisers	For any charity with premises, events or public-facing work
Trustee indemnity	No — a power, not a duty	—	Where trustees face real exposure
Professional indemnity, buildings, contents, cyber, directors and officers	No	Sometimes required by contracts, funders or lenders	As the Commission’s guidance describes

The Commission’s guidance, CC49 “Charities and insurance”, has a list of things trustees must do. It stops at employers’ liability and motor. Its other points are things trustees should do:

• treat volunteers as employees for insurance purposes
• insure buildings the charity owns at full reinstatement value, although CC49 says “there is no actual duty to do so”
• take professional advice before buying discretionary cover
• review rebuild valuations from time to time

Everything a broker offers beyond the first two rows is the trustees’ choice, or a term someone has asked for. The schedule should say which.

Employers’ liability: compulsory, with a minimum and a certificate

In England, Wales and Scotland, the Employers’ Liability (Compulsory Insurance) Act 1969 applies. An employer must insure against claims by its staff for injury at work. So a charity with anyone on a contract of employment must:

• hold cover of at least £5,000,000 for any one occurrence, under the 1998 Regulations
• buy it from an insurer the Financial Conduct Authority has authorised
• put the certificate up at each place of business, where staff can easily see and read it

The penalties in Great Britain are set by the Employers’ Liability (Compulsory Insurance) Act 1969. The fine is up to £2,500 for each day without cover (section 5). The fine for failing to display or produce the certificate is up to £1,000 (section 4(3)).

Northern Ireland is different law. The 1969 Act does not extend there. EL cover in Northern Ireland is required by its own law: the Employer’s Liability (Defective Equipment and Compulsory Insurance) (Northern Ireland) Order 1972.

The Order was made to give the same kind of protection. Its main articles were read at source for this guide. Under the 1972 Order the fine is up to £2,500 for each day without cover (Article 9). The fine for failing to display or produce the certificate is up to £1,000 (Article 8(3)).

Your employers’ liability policy almost certainly does not cover your volunteers

This is the finding that changes what a trustee does.

In Great Britain, the 1969 Act defines who counts as an employee. Section 2(1), verbatim: “an individual who has entered into or works under a contract of service or apprenticeship”. A genuine volunteer has no such contract. So a volunteer sits outside the compulsory regime entirely. Insurers do not read volunteers into an employers’ liability policy.

Keep the two halves apart:

• The law in Great Britain does not require you to insure volunteers under the 1969 Act. That follows from the Act’s own definition.
• The Commission’s guidance says you should treat volunteers as employees for insurance purposes. That is advice, not a legal duty.

The result in practice is stark. A charity with three paid staff and two hundred volunteers can hold a valid employers’ liability policy. Its two hundred volunteers are still not covered by it.

Get it in writing from the insurer. Ask whether volunteers are covered, under which policy, how the policy defines a volunteer, and whether there are age limits. Some charities extend the employers’ liability policy. Others rely on public liability. Either can work. What does not work is assuming.

The volunteer side of the same question is covered in Are volunteers insured, and what do I owe them on health and safety?. That page reaches the same conclusion.

Trustee indemnity insurance: a power you already have, with limits that matter

You do not need a clause in your governing document to buy it. Section 189 of the Charities Act 2011 gives trustees in England and Wales a statutory power to buy indemnity insurance from charity funds. A governing document can only switch that power off, by expressly forbidding it. CC49 says that is extremely rare.

The trustees may buy it only if they decide it is in the charity’s best interests. They take that decision under the statutory duty of care. Whether to buy it at all, alongside the question of incorporating, is the decision in Should we incorporate, and should we buy trustee indemnity insurance?

What matters far more is what it cannot cover. In England and Wales, section 189(2) says the policy terms must exclude:

• any liability incurred by P to pay a fine imposed in criminal proceedings
• any liability incurred by P to pay a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising)
• any liability incurred by P in defending any criminal proceedings in which P is convicted of an offence arising out of any fraud or dishonesty, or wilful or reckless misconduct, by P (a conviction which 'has become final' — s.189(3))
• any liability incurred by P to the charity that arises out of any conduct (i) which P knew (or must reasonably be assumed to have known) was not in the interests of the charity, or (ii) in the case of which P did not care whether it was in the best interests of the charity or not

(P is the trustee. The note on convictions in the third item points to section 189(3); it is not part of section 189(2)’s own text.)

Read that list against the reasons a trustee might want insurance. All of these are excluded: fines, regulatory penalties and a defence that ends in a fraud or dishonesty conviction. So is loss caused by conduct the trustee knew was against the charity’s interests, or did not care about.

A trustee who thinks this insurance makes them safe is wrong about exactly the conduct that would most expose them. What it can cover is honest mistakes: negligence, default and breach of duty or trust. The wider question is answered in Am I personally liable as a charity trustee?

Scotland has a near-identical power in section 68A of the Charities and Trustee Investment (Scotland) Act 2005, inserted in 2010. It carries the same three kinds of exclusion, and a constitution can switch it off only by expressly forbidding it.

Northern Ireland has the same power in section 93 of the Charities Act (Northern Ireland) 2008. Its three exclusions match the England and Wales section 189(2). Like that section, it is a default that a Northern Ireland charity’s governing document can only switch off. The trustees must decide it is in the charity’s best interests first.

Public liability insurance for charities: record who asks for it

Public liability cover pays claims by members of the public who are hurt, or whose things are damaged, by what the charity does. No law makes you buy it. CC49 says, verbatim: “There is no statutory minimum level of cover.”

You need it when someone makes it a term of a deal. Landlords, venues and event organisers often do, and they usually set a level. So for each one, the schedule should record who asks for it, in which agreement, and at what level.

Any “standard” sum you hear is a broker’s view, not law. This page does not print one. For events in particular, see What do we need to check before running a charity fundraising event?.

Scotland and Northern Ireland have no regulator guidance on insurance

CC49 is guidance for England and Wales. Neither of the other two regulators has its own version:

• OSCR — a search of its site found no guide on insurance. It mentions insurance only when a charity changes its legal form, and as one way to manage risk.
• CCNI — its list of guidance has no insurance title, and a search found none.

These are what a search found, not a promise. Either could publish guidance. And they do not change the law. EL and motor cover are required in every nation. Trustees in every nation also have the power to buy cover for themselves, as the trustee indemnity section sets out.

Build the schedule

1. List every policy you hold, and every one a broker offers.
2. Put each in a column: the law, a deal, or your choice.
3. For each deal, record who asks, in which agreement, and at what level.
4. Check your EL cover: the minimum sum, an authorised insurer, the certificate up.
5. Get the insurer’s answer on volunteers in writing, and file it.
6. If you buy trustee cover, minute why, and tell the board what it does not pay for.

Next: What should be on our risk register? Insurance answers some risks; the register is where the trustees list them all.

Common mistake: assuming the employers’ liability policy covers volunteers

The policy is required by law, and “employee” is read loosely. Under the 1969 Act, in Great Britain, an employee has a contract of service or apprenticeship. A true volunteer does not, so is outside it. Insurers do not read them in.

The Commission says you should treat volunteers as staff for cover. That is advice, not law. Get the insurer’s answer in writing.

Common mistake: believing trustee indemnity insurance needs express authority — or that it makes trustees safe

In England and Wales, section 189 gives the power by law. A governing document can only switch it off. What matters is section 189(2), in England and Wales.

The policy must leave out fines and penalties. It must leave out the cost of a defence that ends in a fraud or dishonesty conviction. And it must leave out loss from conduct the trustee knew, or did not care, was against the charity.

Common mistake: treating a “standard” public liability sum as a legal minimum

Brokers quote a customary figure, and it gets repeated as a rule. CC49: “There is no statutory minimum level of cover.” A venue or a lease may require a level. That is a contract term, not law.

Common mistake: buying everything that is sold as compulsory

Every product is sold as essential. Only two are required by law: EL, where anyone has a contract of service, and motor, where you run a vehicle. The rest are asked for by a deal, or are your choice. The schedule should say which.

Worked example

Tollgate Youth CIO, in England, has one employee, a rota of volunteers, and runs its sessions in a hired hall. A broker has proposed six policies.

The trustees sort them into three columns.

Legally required. Employers’ liability, because of the one employee: at least the statutory minimum cover, from an authorised insurer, with the certificate displayed at the hall. Motor only if Tollgate runs a vehicle, and it does not.

Required by a contract. The hall’s hire agreement requires public liability insurance at a level it states. The schedule records the hall as the party asking for it, and the level the agreement sets.

Discretionary. Trustee indemnity insurance: Tollgate can buy it under section 189 of the Charities Act 2011 (England and Wales) without any clause in its constitution. It can do so if the trustees decide it is in the charity’s best interests.

They minute that decision and note what the policy will not cover. The other proposals — cyber, contents — go in this column with a one-line reason each.

Then the volunteers. The employers’ liability policy does not cover them on its own terms. So the treasurer writes to the insurer. The reply confirms they are covered under the public liability policy, defines “volunteer”, and sets an age limit. The reply is filed with the schedule. The age limit goes to whoever runs the rota.