Do you need employers' liability insurance for volunteers?

Employers have a responsibility to maintain a safe working environment for employees, and failure to do so could result in a claim being made against them by the employee to seek compensation. However, volunteers and employees aren't the same thing, which begs the question: do you need employers' liability insurance for volunteers?

What exactly is employer's liability insurance?

In order to answer this question, it’s first important to understand what this type of insurance actually is and how it works. Put simply, employers’ liability insurance financially safeguards a business or charity against allegations of injury or illness to employees arising out of their employment. It is a legal requirement for any organisation, including charities, that has employees on a full-time or part-time basis. The Employers' Liability (Compulsory Insurance) Act 1969 requires employers to have a minimum limit of £5m, although many insurers offer higher levels of cover.

To give an example of a claim, if an employee were to trip and fall on a wire while carrying out work for your charity, injured themselves and made a claim, employer's liability insurance would cover the costs of defending against the allegation as well as any potential compensation payments.

While there are some instances in which an organisation does not require employers’ liability insurance, these instances are very uncommon. For example, you will not need employers’ liability insurance if your business is a limited company with just one employee who owns at least 50% of the business (i.e. you). Similarly, if you’re a sole trader and don’t employ anyone, (or you only employ family members, for example), you should also be exempt.

However, the reassurance of having comprehensive cover is invaluable. The costs attached to defending your organisation against a liability claim could prove damaging, especially for start-ups and SMEs.

Do charities need employers' liability insurance for volunteers?

While some charities believe they don't need the cover if they don't have any paid staff on their books, they still have the same duty of care for volunteers as they do for their paid employees. For this reason, having adequate insurance in place for volunteers can be essential.

That being said, there is not a definitive answer as to whether you legally require employers' liability insurance to cover your volunteers. Insuring your volunteers against injury and illness usually falls into one of two covers - either public liability insurance or employers' liability insurance - depending on your charity's insurance policy. If you're unsure which it is, speak to your insurer.

If you take anything away from this guide, it should be this - if your business or charity has already got employers’ liability insurance in place, anyone who volunteers for you will most likely be covered by this policy. However, if you don’t have this insurance in place, you need to double check with your insurer to see if any other policies you do have cover volunteers in this way.

Either way, as someone who runs a business or charity, this is information you need to be aware of. After all, without the right insurance cover in place, if a claim for injury or illness is brought against your charity by a volunteer, you may have to defend it with the charity's own funds.

Markel Direct insurance policies cover volunteers under employers' liability insurance (with a limit of £10m) which covers against allegations of injury or illness suffered by both your employees and volunteers. For further information, visit our charity insurance page.

How to know if your policy covers volunteers

The easiest way is to check whether or not your current insurance policies cover volunteers is to speak with your broker or insurer. They should know your policies inside out and will be able to go through the policy wording with you to help you understand the limits of your cover.

In terms of policy specifics, there are a few things you can look out for in your contract. For example, even if your employers’ liability insurance does cover volunteers, it may include limitations. Some policies may exclude volunteers both over and under a specified age, for example. Others can also exclude certain types of activities that volunteers may do.

Is there anything else charities should know?

The Charity Commission states that charities must take out employer's liability insurance only from a company working under the Financial Services and Markets Act 2000 (such as Markel), as they maintain a register of authorised insurers. They also require charities to prominently display their employer's Liability certificate, showing that a valid policy has been taken out with the minimum level of cover.

Please note this is not a policy document and contains only general descriptions and illustrations. Policyholders must refer to the actual policy issued for the binding terms, conditions and exclusions of cover.