Home Office Act on Charity Insurance Cost Increases

31st January 2003

The Active Community Unit has published a discussion paper on the insurance problems faced by charities. The document outlines the crisis being faced by the voluntary sector, the effect it will have on vital services, and the urgent need for action to ease the burden. The Home Office will be tendering for a consultant to consider in detail the issues in the discussion paper.

The discussion paper reports that most charities have recently experienced at least a doubling of their insurance premiums. The Charity Finance Directors' Group's (CFDG) own findings last year were that members have experienced rises of up to 330%. The discussion paper also reports that the impact on charities is greater than similar increases in other sectors as they cannot pass on the costs to their "customers".

The discussion paper calls for investigation into more innovative ways of funding and providing insurance cover for charities, and puts forward a number of proposals.

Over the past 18 months, CFDG has been working on the issues around the current problems the sector is facing in relation to insurance and we will be exploring the issue further at our members' meeting in London on 11th March. CFDG plan to input further into the Home Office work and will encourage its members to respond to the discussion paper.

Steve Mahon, CFDG Trustee, who will be speaking at an event hosted by the Association of British Insurers on 7th February said,: "The massive increases in insurance premiums are having a serious impact on charity finances. The publication of this paper represents a great opportunity to investigate, and hopefully put into practice, some solid solutions to the sectors on-going insurance problems. If we can think creatively then insurance hikes need not necessarily result in a cutting back of vital community services."

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