Charities warned following insurance mix-up

Wednesday 14 May 2014

Small charities are being warned to make sure they aren't pushed to take out insurance cover which they don’t legally need. The advice comes from the Association of Jersey Charities, after one local organisation, Jersey Coders, complained that they felt Rossboroughs was trying to get them to take out a £500 policy which wasn't actually necessary. It turns out that the company was quoting UK, not Jersey, law.

The charity runs an after-school club to help build digital skills in teenagers. Its founder and Chairman, Gwyn Garfield-Bennett, said: “A £500 a year bill for insurance when you are a small charity is a large sum of money to find, and the broker told me he wasn’t comfortable in insuring us for Public Liability without including Employers' Liability cover.”

Mrs Garfield-Bennett sought advice from the Association of Jersey Charities and an employment law specialist who both said there is no legal obligation for charities to take out employers' liability insurance on top of the necessary public liability cover.

The Association of Jersey Charities Lyn Wilton said:  “It’s overkill, we wouldn’t say they have to do it, it’s entirely up to the charities themselves, insurance companies are saying they have to but we wouldn’t. The premiums sometimes exceed the amount charities’ manage to raise.”

Callington Chambers Advocate Vicky Milner added: "Current legislation only requires employers to obtain such cover.  A charity with no employees has no obligation to take out ELI insurance.  If in doubt though, do seek advice.”

Rossborough’s Managing Director, Clive De La Cour looked into the matter for Jersey Coders, and says that the broker involved quoted the wrong law:

“In reviewing the correspondence between Jersey Coders and one of our brokers, we have identified an error in the communication, which is regrettable.  The UK Employers’ Liability Act was quoted and not the Jersey law. This has highlighted an important training need, which is now being addressed.”

Mr De La Cour said that the company offers advice on a case-by-case basis because no two charities are the same.

He said: “If there is any possible blurring of the distinction between whether someone is a volunteer or an employee we would always recommend a charity errs on the side of caution and purchases both employers’ and public liability coverage.”

Mr De La Cour is now personally overseeing that the broker involved gets further training.