Churches, charities, community groups and other not-for-profits (NFPs) differ in many of their needs, activities and risks from private businesses. For this reason they should ideally secure not for profit insurance policies from specialists in this field who fully understand the needs of the sector.
Each individual NFP should also have insurance policies specifically tailored to its needs. This is because every church or charity is unique, and is likely to be involved in different activities and carry a set of risks not identical to any other organisation.
How NFPs differ from private business
A NFP may be similar to a business in many ways – such as in employing people in a paid capacity, running an office, handling finances, reporting to the ATO and maintaining safe premises. Many of the risks carried may also be similar – such as accidents and injuries, wild weather, fire, natural disasters, burglary and theft, vandalism, transport and cyber crime.
However NFPs may also differ from many businesses in their activities. These may include:
- Free or low-cost professional services such as counselling or legal advice.
- Events that may include members of the public and involve large crowds.
- Children’s services – including children’s ministries, play groups, youth camps, sporting events, creches.
- Services for the aged or for people with a disability.
- Fundraising and collecting donations.
- Overseas mission trips – including to remote regions.
- Various other activities such as men’s sheds, cafes, working bees, op shops, food distribution and more.
Every NFP should develop control strategies to manage the risks it carries. Combining risk management and the right insurance cover helps to keep the community safe and to financially protect the organisation.
Risk management for NFPs
The word ‘risk’ refers to any hazard or event that could cause injuries or death, property damage or loss, financial loss or interruption of activities.
Risk management is a process of identifying hazards and risks, analysing them as to how likely they are and what the consequences could be, and taking action to control them. It also needs to involve undertaking regular monitoring and reviewing of the program and making adjustments where necessary.
Controlling a risk could involve elimination or removal of the risk, substitution to reduce the risk, or risk isolation – for example, cordoning off an area where there is building damage or slippery surfaces.
It could also involve such things as protective equipment, safer practices, or redesigning an environment to make it safer.
Our previous post on the basics of risk management has more information on controlling risks.
Churches and incorporated NFPs can also be vulnerable to lawsuits. This is not only about someone slipping over on your property and injuring themselves. You could also be sued for alleged abuse, neglect, employee misconduct, poor advice and so on.
Insurance for not for profit organisations
The right local community insurance, church insurance or charity insurance policies can financially protect your organisation for its risks. This includes:
- Property insurance – for loss or damage to your property, and for losses due to interruption to your activities.
- Liability insurance – e.g. general liability in case of personal injury or property damage, and management liability to protect directors and officers.
- Professional Indemnity – cover for professional services including counselling, leadership, pastoral care, prayer ministry and more.
- Motor vehicle – such as car insurance for clergy or staff members.
- Cyber insurance – in case of cyber events such as cyber-crime, hacking or viruses.
- Personal Accident cover – for volunteers and ministers.
- Travel insurance – for domestic and international travel.
- Workers’ compensation cover – compulsory insurance for all Australian employers, administered by state and territory Work Safe organisations.
See our insurance page for more information on our policies. For more detail on church liability, see our previous articles on liability cover for faith organisations and on activities that might be excluded from a liability policy.
Insurance can be complex, but it is an integral part of any thriving community group, and forms part of any robust risk management strategy. By choosing the right cover, you can ensure the protection of your organisation, its members and the wider community.
For assistance with not for profit insurance or risk management for churches and charities, get in touch with us at 13 000 FAITH or by email.
Tags: insurance, risk management