Professional insurance is generally needed to protect the assets and reputation of businesses, should they be sued for making a mistake or have to pay out compensation following an employee or visitor accident. However, professional insurance could also be useful for even charitable organisations.
You may be thinking, why would a charitable organisation with voluntary staff and no profits to keep track of need professional insurance?
Business And Events Insurance
The first reason why these organisations need insurance is obvious. Charities need buildings to work out of and resources to use, and they often put on fundraising events. Therefore, buildings, contents and event insurance may be needed in case something goes wrong. The charity headquarters may become a victim of fire or theft, or an accident may happen at a fundraiser and an injured attendee may seek compensation.
Professional Indemnity Insurance
Although charities don’t operate for profit, the money they do make for charitable causes still needs to be protected, as do the trustees who are responsible for it. If something happens to the money, either due to the trustee’s actions or those of a third party, the trustee may be held accountable for the loss. This is one example of why professional indemnity insurance may be useful for charities.
See pt.2 for information on why charities may need other types of professional insurance.