Charities are businesses that aim to provide a service without making a profit. They hire people to run the charities as well as use volunteers to do day to day tasks. Whenever an employee is paid to perform a duty, there is a contract that covers the terms of the employment. There are also contracts for rental of properties and equipment. If a product is produced, then there can be legal issues surrounding the safety, quality or availability of the product. Just like any business, charities need legal protection. Sometimes love is not enough to cover over a multitude of sins.
What is insurance for a charity?
charities insurance provides financial protection to the charity. Charities can be sued for anything that a regular business can be sued for. By nature, charities do not intentionally stockpile financial resources. Any money collected is put back into the charity. If the charity gets sued there is no money for lawyers or for damages should they be awarded. Insurance provides the necessary funding for legal protection so the charity can focus on providing for needs their charity addresses.
Why is it good?
Insurance is all about risk. Some situations have a higher risk of problems than others. Overseas aid workers are in physical risk from whatever disaster they are assisting recovery from. They are also exposed to more diseases from not only being in a foreign environment but also from the collapse of sanitation systems. Who pays if a worker gets sick, injured or killed? If a charity rents a building and the building needs repair but the owner doesn't want to pay for it, insurance can help cover the cost of legal fees to either get the repairs done or get out of the lease.
What are the effects of it?
Charities insurance can protect everyone and everything from personal financial liability. It's nice to give to others out of the goodness of the heart, but not if it financially destroys your life. Accidents happen. Fraud happens. Things just happen. Insurance gives peace of mind so that the charity can focus on serving and less on self
Is it worth the money?
Consider the cost of a law suit. Consider the financial burden of a disability or some other illness. How big is the charity? Does it plan to grow? The risk to a charity will be proportional to its size and the type of service it provides. A small puppy rescue group that fosters abandoned puppies will not incur as much risk as a foreign aid worker. However, does the charity have enough resources to cover rabies treatment? Imagine the worst case scenario, estimate how much it could cost and then decide if insurance is worth paying for. Charities insurance can provide the necessary money when problems do arise.
What do other people say about it?
To find out what people say about charities insurance, look at the reviews for the specific insurer you are thinking about getting insurance from. The bottom line is, do they pay when you need them?
Life is all about risk. The less risky we live the less we think we need insurance. Charities often think they are exempt from the realities of life but they aren't. Having insurance that meets the specific needs of the charity is not only a good financial decision, but a responsible use of resources.