Employers Liability Insurance for Churches and Religious Organisations

Churches, mosques, temples, and other religious organisations operate differently from traditional commercial businesses. However, when it comes to the Employers’ Liability (Compulsory Insurance) Act 1969, the law makes no distinction for faith-based groups. If your religious organisation employs staff—such as clergy, administrators, or cleaners—you are legally required to hold employers’ liability insurance. Ignorance of the law is not a defence, and failing to secure cover can result in a £2,500 daily fine from the HSE.

What Is It and Who Needs Cover?

Employers’ liability insurance protects the organisation if an employee is injured or falls ill due to their work. For religious groups, the definition of an “employee” can sometimes be complex. While ordained ministers may have unique tax statuses with HMRC, secular staff like groundskeepers, organists, and office administrators are standard employees. Furthermore, many insurers bundle cover for unpaid volunteers into employers’ liability policies, making it crucial for community-focused groups. A £10M standard limit provides financial security against large claims.

Key Factors for Religious Groups

1. Paid Staff: Any paid employee triggers the legal requirement under the Employers’ Liability (Compulsory Insurance) Act 1969.
2. Volunteers: While the law strictly requires cover for paid staff, protecting volunteers is a moral duty and often covered under the same policy.
3. HSE Fines: Charities and churches are not exempt from the £2,500 daily fine for non-compliance.
4. Certificate Display: The certificate of insurance must be displayed in the church office or hall.
5. RIDDOR & Safety: Maintaining safety standards and adhering to RIDDOR reporting remains mandatory.

Step-by-Step: Securing Compliance

1. Identify Your Workforce: Audit everyone who works for the organisation, noting who receives pay via HMRC PAYE and who is a volunteer.
2. Purchase Specialist Cover: Use a broker to find a policy tailored to charities or religious groups, ensuring it includes a £10M standard limit.
3. Display the Certificate: Pin the certificate of insurance to the staff noticeboard in the administrative office.
4. Implement Safety Procedures: Keep accident books up to date and report serious incidents to the HSE.

Common Mistakes

• Assuming Charity Exemption: Believing that being a registered charity or religious body exempts the group from the Employers’ Liability (Compulsory Insurance) Act 1969.
• Ignoring Cleaners and Maintenance Staff: Failing to insure part-time maintenance workers.

Real-World Scenario

A community church employed a part-time caretaker and relied on dozens of volunteers. The church committee assumed they did not need employers’ liability insurance because they were a non-profit. When the caretaker suffered a serious fall from a ladder, a RIDDOR report was filed. The HSE investigated and issued the church a devastating £2,500 daily fine for operating without cover, severely depleting their community funds.

FAQ

Do churches need insurance for volunteers? While not strictly legally mandated for unpaid volunteers under the Act, it is highly recommended and often included by insurers.

Are clergy members considered employees? Employment status can vary, but secular staff (cleaners, admins) are definitely employees. Check HMRC guidelines for specific clergy status.

What is the penalty for non-compliance? The HSE can issue a £2,500 daily fine for operating without valid cover.

Key Takeaways

• Religious organisations must comply with the Employers’ Liability (Compulsory Insurance) Act 1969.
• Protect your group with a £10M standard limit.
• Display your certificate of insurance clearly.
• Avoid devastating HSE fines by auditing your workforce classification.

Author bio: Claire Ashford, Cert CII, specialises in compliance and risk management for the non-profit and charity sectors.