Charity Risk + Insurance Outlook 2026: What Every Charity Needs to Know

With insurers taking a closer look at organisational risks, regulatory expectations increasing and new threats continuing to emerge, charities are being encouraged to think more strategically about how they manage risk and protect their organisations.

For many charities, insurance is one of the most significant operational costs. Yet it remains one of the most important tools for protecting services, staff, volunteers, trustees and beneficiaries when things go wrong.

This webinar explored the changing insurance market, emerging risks facing charities, and practical steps organisations can take to strengthen their risk management and insurance arrangements.

Why 2026 Could Be a Good Time to Review Your Insurance

One of the most significant developments highlighted during the webinar is a shift in the insurance market itself.

After several years of what the industry terms a “hard market”, where premiums increased and insurer appetite was restricted, the sector is beginning to move towards a softer market.

In practical terms, this means:

• More insurers competing for business
• Greater flexibility around certain risks
• Improved cover options
• Better opportunities to review premiums
• Potentially fewer restrictions and exclusions

For charities with larger insurance programmes in particular, 2026 may be an ideal opportunity to review existing arrangements and ensure cover still reflects organisational needs.

However, the focus should not be solely on price. A review should also assess whether the charity is covered for all current activities, risks and operational changes.

Cyber Risk Remains One of the Biggest Threats to Charities

Cyber crime continues to be one of the fastest-growing risks facing charities.

Many organisations assume cyber incidents are primarily about data breaches or ransomware attacks. While these remain serious concerns, the webinar revealed that the most common cyber claims often involve something much simpler.

Business Email Compromise

One of the leading causes of cyber losses is business email compromise.

This typically occurs when criminals gain access to an email account and use it to:

• Impersonate senior staff
• Request fraudulent payments
• Alter bank account details
• Divert income or funding payments
• Manipulate financial transactions

Modern cyber criminals are increasingly sophisticated. Rather than sending obvious scam emails, they often spend weeks monitoring communications and learning how organisations operate before acting.

No charity is too small to be targeted.

Why Charities Are Particularly Vulnerable

Many charities hold sensitive information, including:

• Beneficiary records
• Financial details
• Safeguarding information
• Health data
• Volunteer information

The sector’s reliance on volunteers, remote working and third-party software can also create additional vulnerabilities if not managed effectively.

As a result, charities should regularly review both their cyber security arrangements and their insurance protection.

Employment Risks Are Increasing

Another area of growing concern is employment-related risk.

The charity sector has traditionally experienced higher levels of employment disputes than many other sectors, and changing employment legislation may increase exposure further.

Potential areas of risk include:

• Grievances
• Disciplinary processes
• Discrimination claims
• Unfair dismissal allegations
• Employment tribunal cases

Volunteer-led organisations often assume these issues only affect larger employers, but employment disputes can arise in organisations of all sizes.

Trustees and senior leaders should ensure they understand what protection is available under:

• Legal expenses policies
• Employment practices liability cover
• Trustee indemnity insurance

Understanding the differences between these covers is essential before a dispute arises.

Governance and Reputation Matter More Than Ever

Insurance providers are increasingly interested in how charities are governed.

Good governance is no longer viewed as a separate compliance issue. It is becoming a key component of risk assessment.

Insurers want reassurance that organisations have:

• Effective safeguarding arrangements
• Strong financial controls
• Appropriate policies and procedures
• Active risk management processes
• Clear governance structures

At the same time, charities are facing growing public scrutiny.

Stakeholders, funders and regulators increasingly expect transparency about how organisations operate and how they deliver public benefit.

Strong governance can reduce both operational risks and insurance costs over time.

Understanding Your Duty of Disclosure

One of the most important messages from the webinar concerned a legal principle that many charities are unaware of: the duty of disclosure.

Unlike personal insurance policies, commercial insurance places a responsibility on organisations to disclose information that an insurer would reasonably expect to know.

This can include:

• New services
• Changes in activities
• New locations
• Vulnerable beneficiary groups
• High-risk programmes
• Significant organisational changes

If a charity fails to disclose relevant information, claims can become significantly more complicated.

The safest approach is simple:

If in doubt, disclose it.

Maintaining open communication with insurers and brokers helps avoid problems later.

When Did You Last Read Your Policy?

A poll conducted during the webinar revealed a familiar pattern: most participants had not read their full insurance policy wording.

This is entirely understandable. Many policy documents run to hundreds of pages and contain complex technical language.

However, charities should make time to review:

Policy Summaries

These provide an accessible overview of:

• Key covers
• Major exclusions
• Important conditions
• Claims procedures

Endorsements

Endorsements modify standard policy wording.

They can:

• Add restrictions
• Remove restrictions
• Introduce conditions
• Extend cover
• Exclude specific activities

Sometimes the most important insurance changes are hidden within endorsements rather than the main policy wording.

Don’t Rely on Historical Insurance Arrangements

A common issue across the sector is organisations renewing insurance year after year with little consideration of whether cover remains appropriate.

Many charities have evolved significantly over time.

They may now be:

• Delivering different services
• Working with different beneficiary groups
• Operating in new locations
• Using new technologies
• Managing larger teams

Insurance arrangements must evolve too.

One of the key recommendations from the webinar was to avoid assuming that what worked previously is still suitable today.

How to Approach Risk Management

Insurance is only one part of effective risk management.

The webinar encouraged charities to start with their mission and objectives before considering insurance.

A helpful process is:

1. Understand Your Goals

What is your organisation trying to achieve?

2. Identify Risks

What could prevent those objectives being delivered?

3. Assess Impact

How serious would each risk be?

4. Implement Controls

What processes, procedures or safeguards can reduce those risks?

5. Transfer Risk Where Appropriate

Use insurance where it provides value and protection.

This approach ensures insurance supports wider organisational strategy rather than existing as a separate compliance exercise.

What To Do When Something Goes Wrong

Many organisations hesitate to contact insurers when incidents occur.

However, early notification is often essential.

If something happens that could potentially result in a claim:

• Record what happened
• Preserve evidence
• Keep detailed notes
• Inform your insurer promptly
• Seek advice before admitting liability

A common mistake is attempting to resolve issues independently before involving insurers.

This can create complications later if formal claims emerge.

Insurers and brokers would generally prefer to be involved early rather than after significant decisions have already been made.

Final Thoughts

Risk management is no longer simply about compliance or buying insurance once a year.

Modern charities operate in an increasingly complex environment shaped by cyber threats, employment challenges, governance expectations and evolving regulation.

The organisations best positioned for the future will be those that:

• Review insurance regularly
• Understand emerging risks
• Strengthen governance
• Improve cyber resilience
• Maintain accurate records
• Treat risk management as a strategic priority

Most importantly, charities should view insurance not as an administrative burden, but as a critical tool that helps protect services, people and the communities they exist to support.

By taking a proactive approach now, organisations can enter 2026 with greater confidence, stronger protection and a clearer understanding of the risks they face.