Charity Shop Insurance
A charity shop looks like any other shop from the street, but almost everything behind the counter works differently. The stock is donated, so nobody paid for it and its value is hard to pin down. Most of the people working there are volunteers rather than employees. And the shop is usually one part of a charity that has its own trustees, activities and insurance.
Why Charity Shops Are Different
Those three things are where charity shop cover goes wrong. Volunteers who are not declared, second hand electrical items sold without being checked, and a shop that nobody is sure is covered by the charity's main policy or needs one of its own.
What Charity Shop Insurance Covers
Employers' liability, including volunteers
Required by law for any paid staff, at a £5m statutory minimum. Most charity shop policies extend this cover to volunteers, but the number of volunteers and the work they do must be declared.
Public and products liability
Injury to customers and donors in the shop, and claims arising from donated goods you sell, such as a faulty electrical item or furniture that fails.
Contents and stock
Shop fittings, the till and your donated stock. Stock is valued at what it would cost to replace, which for donated goods is usually set as a sensible agreed figure rather than a purchase price.
Money
Cash in the till, in the safe and on the way to the bank. Charity shops often handle more cash than people expect, especially on busy Saturdays.
Business interruption
The income the shop raises for the charity, lost while it cannot trade after a fire, flood or other insured event.
Glass
The shop front and windows. A charity shop relies on its window display as much as any other shop.
Where The Cover Stops
Wordings differ between insurers, so treat these as the usual position rather than as universal fact. Where one of them matters to you, it is worth checking on your own schedule before you need to.
Undeclared volunteers
If the insurer does not know you rely on volunteers, or how many, a claim from an injured volunteer can become difficult. Declare them, including those working in the sorting room or collecting donations.
Untested electrical goods
Selling second hand electrical items that have not been safety checked makes a product liability claim much harder to defend. Many charity shops either test every electrical item before sale or do not accept them.
Donations left outside
Bags left on the doorstep overnight are not insured stock until they are inside, and they can cause injury to passers by or be a fire risk. Insurers may ask how you manage them.
Second hand upholstered furniture
Upholstered furniture sold second hand still has to meet fire safety requirements and carry the correct labels. Products liability does not make non compliant stock compliant.
Trustees' liability
A shop policy covers the shop. The personal liability of the charity's trustees is a separate matter and usually sits on the charity's wider cover, not the shop's.
Volunteers Need To Be On The Policy
Most charity shops run on volunteers, and many have more volunteers than paid staff. Volunteers can be hurt like anyone else: lifting bags of donations, climbing to reach high shelves, or using a steamer in the back room.
Employers' liability is compulsory for paid staff, and most charity shop policies extend it to volunteers as well. The important thing is to declare how many volunteers you have and what they do, including those collecting donations, driving or working in a separate sorting room.
Volunteers under 16 or over a certain age may need to be specifically agreed with the insurer. It is worth asking at the start rather than finding out after an accident.
Selling Donated Goods Safely
Donated stock brings product risks a new goods shop does not have. Electrical items may be old, damaged or unsafe. Upholstered furniture may not carry fire safety labels. Toys may have missing parts or small pieces that are a choking risk.
Most charity shops manage this with simple rules: electrical items are safety tested before they go on sale or are not accepted at all, upholstered furniture without the correct labels is turned away, and toys are checked before they reach the shelf. Insurers will ask about these rules, and following them is what defends a claim.
Keep a record of what was checked and when. If a customer says an item you sold caused an injury, being able to show it was tested is far better than relying on memory.
The Shop And The Charity's Main Policy
Many charities already have insurance for their main activities, and the shop may already be covered under it. Equally, some charity policies were set up before a shop opened and do not mention it at all.
Check whether the shop is named on the main policy and whether it covers retail activity, donated stock, money and volunteers in the shop. If it does not, the shop can be added or insured separately. What matters is that somebody has checked, rather than assuming.
Trustees' personal liability is a separate question again. It usually sits on the charity's main cover and is not something a shop policy deals with.
How To Choose Insurance For A Charity Shop
A charity shop is often insured as if it were a normal shop with normal staff and bought in stock, or assumed to be covered under the charity's main policy without anyone checking. We are an FCA regulated broker and will not tell you we are the best choice. These are the things that decide whether a charity shop is properly covered, and you can measure any broker against them.
Do they ask about your volunteers?
A broker should ask how many volunteers you have, what they do and how old they are. If volunteers are not on the policy, a claim from one can become a problem.
Do they ask what you accept and how you check it?
Electrical items, upholstered furniture and toys all carry product risks. A broker who asks about your rules is pricing the right risk.
Have they checked the charity's main policy?
Before arranging a new policy, a good broker will ask whether the shop is already covered elsewhere and fill any gaps rather than duplicate cover.
Is the money cover right for your takings?
Ask what the limits are for cash on the premises, overnight and in transit to the bank, and whether they match your busiest days.
Does the cover include the sorting room or store?
If donations are sorted or stored somewhere other than the shop, that location needs to be on the policy too.
Factually, here is what we do. We ask about volunteers and declare them, we check how you handle electrical goods, furniture and toys, we look at whether the charity's existing policy already covers the shop before suggesting anything new, and we set money and stock limits from your actual takings and stock. We are a broker, so we take it to several insurers rather than one.
What Moves The Price
Every shop is priced on its own details. These are the things that move the premium:
- Number of paid staff and volunteers
- Whether you sell electrical goods or furniture
- Cash taken and how it is banked
- Location and security of the shop
- Any separate sorting room or warehouse
- Claims history
We are a broker, so we take it to several insurers rather than quoting one. Call 02382 000820 for a quote.
What We Need To Quote
- Shop address and any separate sorting or storage premises
- Number of paid staff and volunteers, and what volunteers do
- What you accept, and how electrical items and furniture are checked
- Typical and peak cash on the premises, and how it is banked
- Contents and stock values
- Whether the charity has an existing policy, and what it covers
- Any claims in the last five years
Cover that often goes with this
The gaps we most often find sitting next to this policy.
- Public liabilityWhere products liability for donated goods sits, and what it does and does not answer.
- Furniture and bed shopsUpholstered furniture, fire safety labels and deliveries to customers' homes.
- Shop insuranceThe general retail package, and the sums insured most shops get wrong.
- Business interruptionThe cover that decides whether a shop survives a fire or a flood.
- Talk to a brokerTell us what you sell and we will tell you what actually needs covering.
Common questions
Are charity shop volunteers covered by insurance?+
They can be, but only if the policy includes them. Most charity shop policies extend employers' liability to volunteers, and the number of volunteers and the work they do must be declared. Tell your broker about volunteers in the sorting room, collecting donations or driving too.
Does our charity's main policy cover our shop?+
Sometimes. Check whether the shop is named on the policy and whether it covers retail activity, donated stock, money and volunteers in the shop. If it does not, the shop can be added or insured separately. Do not assume either way.
Who is the best insurer for a charity shop?+
There is no single best insurer for every charity shop. Judge any option on how it treats volunteers, donated goods and cash, whether it covers any separate sorting room, and whether it fits with the charity's existing cover. We compare several insurers against those points. Call 02382 000820.
Can we sell donated electrical items?+
Many charity shops do, but the items should be safety tested before sale, and insurers will usually ask how you manage this. If an untested item injures someone, the claim is much harder to defend. Some shops simply do not accept electrical donations.
Are donations left outside the shop covered?+
Usually not until they are brought inside. Bags left outside overnight can also cause injury to passers by or be a fire risk, so it is worth having a plan for clearing them first thing.
Other shops we cover
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