Insurance for NGOs

Insurance is usually one of the last things on the minds of most activists.

However, failing to consider the need for insurance can be a big impediment to a campaign. This is because not having it may limit the sort of activities you can do.

For example, it may be necessary to have public liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More insurance to hire a hall, or to hold a function at a local park. You may also require personal accident insurance to protect yourself in the event of a volunteer being injured.

You or your organisation may decide that you don’t want insurance because you are philosophically opposed to it. This is fine in terms of being consistent with your function and purpose; however, it can limit your opportunities to undertakeTo promise, in the course of legal proceedings, to do or refrain from doing an act. An undertaking is enforceable by attachment or like an injunction. More certain activities.

For a great overview of insurance and risk management issues for community organisations check out the Our Community website.

There are two key ways to arrange insurance cover:

Firstly, your organisation may wish to align with a sympathetic organisation that already has insurance by way of an auspice arrangement.

Under such an arrangement, your organisation could potentially benefit from the insurance already held by the other entity. 

An auspice arrangement is like a sub-contracting arrangement: the principal organisation pays for insurance coverage for the purpose of certain activities and then sub-contracts with the auspiced organisation to undertakeTo promise, in the course of legal proceedings, to do or refrain from doing an act. An undertaking is enforceable by attachment or like an injunction. More the activity. 

Such an arrangement may require establishing a separate entity that offers to undertakeTo promise, in the course of legal proceedings, to do or refrain from doing an act. An undertaking is enforceable by attachment or like an injunction. More the service activity (usually along with other services including auditing your financial affairs, receiving and acquitting grants and the like).  Church groups are a good example of organisations that are sometimes willing to auspice the activities of community groups.

For further information on auspice arrangements, check out the PilchConnect website.

Secondly, your organisation may wish to obtain insurance in its own right.

This insurance may include cover for, amongst other things:

• Public liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More:  which will insure the organisation against liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More arising from a personal injury and/or property damage claim made by a third party.
• Directors and officers liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More: which will insure officers of the organisation (and sometimes the organisation itself) in relation to potential liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More arising from a wrongful act done by an officer.
• Personal accident (volunteer) liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More: which will insure members and volunteers of the organisation against liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More arising from an accidental injury, disability or death which occurs while the member/volunteer is doing work for the community organisation.
• Fraud: which will insure the organisation against the misappropriation of funds and/or property by employees or officers of the organisation.

There are various insurance providers that offer insurance cover to not-for-profit organisations, including:

• The Community Care Alliance of NRMA, and
• Allianz and QBE (insurance providers) provide public liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More insurance for activities including community events, community centres and home care. It is now up and running and you can obtain a quotation at the Community Care Underwriting Agency website.

Community Groups Insurance ‘Scheme A’ public liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More scheme has been developed by the Municipal Association of Victoria (MAV) to provide affordable public and product liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More cover to not-for-profit community organisations (NPOs). The scheme was developed as a response by local government to increases in premiums for NPOs.

The scheme indemnifies a not-for-profit organisation against legal liabilityLegal responsibility, e.g. for breaking a contract, committing a crime. It may be civil (q.v.) or criminal, and is enforced by civil or criminal courts. More for personal injury and/or property damage claims made by third parties as a result of negligenceA tort (q.v.) involving the breach of a duty of care (q.v.) resulting in loss or damage to another person. More occurring in connection with the NPO’s activities and/or their products (goods sold). Two levels of cover are available: $5 million and $10 million, with a standard excessAmount of money the insured person has to pay towards the cost of settling a claim under the insurance contract. More of $1,000 for each and every claim.

Before choosing an insurance policy, you should carefully examine the terms and conditions for exclusions and restrictions.  Further information on insurance and risk management for Victorian community organisations can be found in the Getting Started section of the PilchConnect website.