Your guide to Not-For-Profit public liability insurance

Do not-for-profit (NFP) businesses need public liability insurance?

While it's not required by law, having public liability insurance is not something you want to easily dismiss. Public liability insurance protects your NFP organisation if someone claims your negligence has led to property damage or an injury. This can help cover the compensation or legal fees of paying out a third party, as well as any costs in the defence of these claims.

Negligence or unexpected mishaps won't always be in your control, even with strict safeguards in place. So it can be very helpful to have another safety net. This is particularly important if your organisation regularly engages with the public with events and serves food or drinks.

Public liability insurance isn't a perfect fit for every NFP. If your organisation has minimal contact with third parties or the public, it might make sense to go without it. For example, if your organisation operates entirely online, the risk of a claim might be too low to justify the cost of public liability premiums.

Should Not-For-Profit businesses have business insurance?

Depending on how your NFP operates, it's a good idea to consider various types of business insurance. Here are a few options:

Public liability insurance:

Covers your organisation against claims related to injuries or damages to third parties during the course of your work, or while using your products or services.

Professional indemnity:

Protects against claims of negligence related to the advice or services your organisation offers. This is crucial if your NFP provides healthcare or financial advice.

Workers compensation insurance:

In most cases this will be compulsory if your NFP has paid employees. It covers expenses like wages and medical bills if an employee is injured at work.

Property insurance:

Covers damage to your organisation's property, including equipment and facilities. If your organisation hosts many events or has high value inventory on site, this type of cover can be valuable.

Where can a Not-For-Profit business get business insurance?

You can purchase business insurance directly from insurance providers or brokers who specialise in finding insurance for non-for-profit organisations. Buying through a broker can give you access to tailored packages as well as professional advice. This can be really helpful if your NFP has complex operations and needs a policy that is tailored.

Some examples of providers that offer business insurance specifically for NFP organisations include GIO, NRMA, and Unicorn Risk Services.

What happens if a Not-For-Profit business doesn't have public liability insurance?

While the government won't come after you, not having public liability insurance exposes your organisation to significant risk. If a claim is made against you – like a slip and fall incident during an event – your organisation could be liable for hefty legal fees and compensation costs.

FAQs

• What insurance should an NFP have?

  While there are a few options to consider, it will come down to the specific needs and activities of the NFP. Some of the cover types to consider include; public liability insurance, professional indemnity insurance, property insurance, and workers' compensation insurance.

• Does a charity need public liability insurance?

  While it's not a legal requirement, it's generally advisable for charities to have public liability insurance. This can help safeguard the charity against any potential claims of negligence and help the team focus on completing the charity's mission.

• What's the difference between a public liability policy and a NFP public liability policy?

  NFP public liability policies are specifically designed to address unique risks NFPs face. This can include cover for events and volunteer activities that standard policies may not cover. If you're unsure about the unique risks of your NFPs it can be helpful to speak directly with a public liability insurance provider, a financial adviser or an insurance broker for more information.

• Does NFP liability insurance cover community services?

  Yes. NFP liability covers any activities where the public engages the NFP, including community events and deliveries.

Written by

Cameron Thach

Insurance Content Writer

Cameron is the local insurance scholar at Finder. With a diverse background writing in independent education, web-3, and finance, his mission is to build helpful content and that speaks to readers in language they understand. See full bio