Charity Insurance for Shops & Business

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Charity insurance is a packaged insurance plan that protects the charity, its officers, and the businesses it operates against lawsuits. Read this guide to know the inclusions, the cost of premiums, and the best companies. 

What Kinds of Insurance Do Charities Need?

Charities and their businesses need professional liability, public liability, and general liability insurance against lawsuits from third parties. Directors' and officers' liability insurance is also important to protect the executives. Commercial property insurance is for the office, while workers' compensation insurance is for full-time and part-time employees. All of these policies are offered by charity insurance packages.

General Liability Insurance for Charities

Use the table above to see which insurance company offers the best general liability policy in their charity organization and charity shop insurance bundles. 

Your charity must have a $1 million-$2 million general liability insurance to cover accidents that happen in its headquarters or at the commercial space of its business. 

This insurance takes effect if clients file a claim for bodily injury or property damage. In practice, general liability insurance can help in these situations:

• An independent window cleaner falls from a height while cleaning the window of your charity’s high rise office building

• A sponsor slips and falls while visiting your charity’s office

• The sprinkler of your charity suddenly got defective and soaked the phone of a passerby

Each time a claim for accidents is filed, a general liability policy is the charity business insurance that will allow you to cover the following expenses without worrying about the resulting financial losses:

• Emergency room fees, doctor’s fees, medication, and other expenses for medical treatment

• Reimbursement or refund for the damaged property

• Settlements

• Attorney fees, investigation fees, and other legal expenses

• Court judgments 

Bodily injuries and property damage claims aren’t the exposures. This is why carriers automatically include the following coverages in their general liability insurance for small charities and nonprofit groups:

• Tenant’s legal liability coverage

• Products and completed operations coverage

• Hired/non-owned auto liability coverage

Charity Public Liability Insurance

Small charity insurance might offer a public liability policy, which works the same way as a general liability policy. That said, you can use this insurance to cover claims for bodily injuries or property damage. 

In practice, public liability insurance for charity organisations is offered if the insurance company doesn’t underwrite general liability insurance and vice versa. Insurance companies in the USA rarely sell charity public liability insurance. In contrast, this is commonly sold by UK insurance companies. 

Professional Indemnity Insurance for Charities 

Use the table above to see which insurance company offers the best professional indemnity insurance for charities. 

Professional indemnity insurance will cover settlements, legal fees, and court judgments if third parties hold your charity responsible for:

• Negligence

• Violation of good faith

• Misrepresentation

• Breach of contract

Purchasing professional indemnity insurance is smart if your charity and its business are involved with the following activities:

• Mental healthcare

• Social work

• Elderly care

• Youth sports training, coaching, and development

• Remodeling houses for people with disabilities

Professional liability insurance for charities and community groups is available as stand-alone coverage or as an add-on to general liability insurance. Moreover, you also get the option of having it as a claims-made or occurrence insurance policy. 

Directors and Officers Liability Insurance

Insurance companies will offer directors and officers liability coverage if you’re looking for charity trustee insurance. 

Directors and officers' liability insurance do the following:

• Cover the legal expenses on behalf of your charity’s directors and officers if a lawsuit is filed against them

• Cover the financial losses of directors and officers if the claimant wins the lawsuit

• Cover your charity if it’s also held liable for the misconduct of directors and officers

Your charity can usually use directors' and officers' liability insurance to cover claims for misappropriation of funds and misrepresentation. 

Directors' and officers' liability insurance is very important when running a charity because lawsuits against executives can be very costly.

Charity Cyber Liability Insurance

Your charity will find it easier to inform the public of its advocacies, get donations, and hire volunteers with a website. Consider making one right now. And when your website is up and running, don’t forget to buy cyber liability insurance for charities.

Someone might breach your charity’s website and gain access to the sensitive information users provided-credit cards, phone numbers, addresses, emails, and more.  Once cybercriminals do something with the information they’ve stolen, users might incur losses. Of course, they’ll file a claim against your charity to get some reimbursement. 

The function of cyber liability insurance is very straightforward-to cover your charity’s defense costs and settlements to aggrieved parties affected by the data breach. Also, it will reimburse what you spent on PR to prevent the situation from getting out of hand.

Commercial Property Insurance for Charities

A lot of your charity’s financial resources will be spent on owning and maintaining its headquarters. Your charity will lose a lot if something happens to its office and there’s no insurance ready and waiting.

Tailored plans for charity insurance cover the office if you add a commercial property policy. Commercial property insurance will cover reconstruction or repair expenses if your charity’s office is destroyed or damaged by:

• Fire

• Theft

• Vandalism

• Civil commotion

• Riot

• Weather

• Volcanic action

• Lightning

• Sinkhole collapse

• Impact

• Falling objects

• Aircraft

• Vehicle

It’s already a given that, if there’s an office, then inside it are valuable objects such as computers, documents, water dispensers, television, printers, photocopiers, and telephones.

Commercial property insurance for charities comes with contents coverage. Contents coverage will reimburse the estimated value of valuables inside your charity’s office if the exposures in the list above happen.

In addition, consider checking your quote for commercial property insurance as these coverages might be automatically included:

• Outdoor signs coverage

• Equipment breakdown coverage

• Accounts receivable coverage

• Utility services interruption coverage

Business Owner’s Policy for Charities

Use the table above to see which insurance company offers the best business owner’s policy for charities.

Insurance companies might allow your charity to avail a business owner’s policy.

A business owner’s policy bundles general liability and commercial property insurance.

Premiums for a business owner’s policy are 10% cheaper than when you bought general liability and commercial property separately.

Some insurance companies allow you to modify your business owner’s policy by adding optional professional liability, business interruption, equipment breakdown, and D&O insurance policies.

Commercial Auto Insurance for Charities

For charity vehicle insurance, what you’ll need to purchase is a commercial auto policy. This is either available as a stand-alone policy or as an add-on to your charity insurance package. Commercial auto insurance will:

• Cover accidents that your charity’s vehicle caused while it’s being used for events, fetching clients, and business trips

• Pay for the repair or replacement of parts if your charity’s vehicle is damaged by fire, theft, vandalism, and other covered perils

• Shoulder the medical treatment of the driver and passengers if an uninsured/underinsured vehicle crashes your charity’s vehicle

Note that authorities will require you to get the minimum level of charity car insurance. Failure to do so will result in jail time and hefty fines.

By the way, some insurance companies sell temporary charity van insurance. This is a short-term commercial auto insurance that lasts for hours, days, weeks, or months. The coverage of this policy applies to vehicles your charity owns, leases, or borrows.

Workers Compensation Insurance for Charities

Your charity needs workers' compensation insurance if it employs one or more full-time and part-time employees. On the flip side, there’s no need to get this coverage if executives and other offices solely manage your charity.

Workers' compensation insurance will take care of the following expenses if the employees of your charity sustain a work-related injury or disease:

• Medical treatment

• Hospitalization

• Medication

• Rehabilitation

• Lost wages

• Funeral expenses and allowance to dependents in case of death

A $500,000-$1 million employer’s liability coverage can be optionally added to workers' compensation insurance. You can use this to cover legal expenses if employees, who sustained a work-related injury or disease, file a negligence claim.

Event Insurance for Charities

Your charity might host fundraisers, community contests, and other events. Your existing charity insurance won’t cover events. And so, you’ll need a separate event insurance coverage.

Event insurance is a short-term coverage for any activities hosted by your charity. Here’s a quick summary of its functions:

• Cover the medical treatment of participants that sustain injuries or property damage during your charity’s event

• Take care of reimbursements, repairs, or replacements if the equipment your charity rented for the event got lost or damaged

• Reimburse non-refundable expenses if your charity’s event gets canceled

Charity Insurance Cost 

The average charity insurance cost is $38 per month or $456 per year for a $1 million general liability policy. Factors that affect the cost of premiums are business history, claims history, number of employees, annual revenue, and location. Here’s another table showing how much the recommended carriers charge for a $1 million general liability insurance for charities.