A charity, like a business, needs to manage its risk. The risks that charities face are like those of commercial organisations, but there are differences. Buying insurance is part of a risk management process and our guide – and the team at CaSE Insurance – are here to help you navigate the risk management and insurance world.
Every charity should develop a process that meets its own needs and is appropriate to the organisation’s complexity, scale and resources. Equally, charity trustees should ensure that they understand their responsibilities for risk management and should control and commit to the process they create.
The Risk Management Process
Review your risk. You need to search for risk. What situations might stop your charity meeting its charitable objects?
Register your risk. Set up a simple spreadsheet; there are many templates available from specialists, or on the internet or you can ask us for one.
React to risk. Act to reduce all the risks you have identified. Create a business continuity plan that looks at the major risks you identified in your register and how you’d react if the risk were to occur.
Reduce liability. With the remaining risks, you must decide whether to accept the potential losses or insure against them. You can reduce or remove your potential losses through appropriate insurance.
Review your risk (again). Trustee boards should have a regular risk review on their agenda that looks at any changes in charity direction or activities.
By the time you reduce liability you will have identified and planned around your major risks. Your decision is then concerning insurance. If you’ve not involved a specialist charity insurer or broker in the journey so far, now’s the time to do so.
There are many specialist charity insurers and brokers, and numerous charity insurance policies that may benefit your circumstances. Review all the options available to you and ensure that the insurances that you purchase are suited to your organisations activities, complexity, scale and growth plans. Developing a strong relationship with your insurer or broker can also assist with future risk management and in the case of claims arising.
We’ve created a comprehensive Guide to Insuring Your Charity, Social Enterprise or Voluntary Organisation. Find out more about CaSE Insurance here.