Risk management and insurance
Managing health and safety is essential to successfully running a community organisation.
Managing health and safety
Managing health and safety in your community organisation is similar to managing any other risk. A typical approach includes:
- Identifying the risks and who is at risk
- Assessing and prioritising the impact of each risk
- Deciding what you are going to do to control or manage each risk
- Implementing and evaluating your actions
One method of managing risks to your organisation is through insurance which can cover the financial impact of third party claims. Insurance is an important consideration for not-for-profit groups, it is sometimes essential under the terms of a lease or a funding agreement. There are many different kinds of insurance that address different kinds of risks.
Common types of insurance include:
- Public Liability
- Directors and Officers
- Asset or Contents Insurance
- Event-specific insurance
- Volunteer protection
The Not-for-profit Law Risk and Insurance Guide (pdf, 1.13MB) provides detailed information on risk management strategies and different insurance products that can be used as part of a community organisation's risk management strategy.
Public liability insurance (PLI)
It is not essential that your community group has Public Liability Insurance but may be necessary for some groups. If somebody is injured or has their property damaged as a result of your community group’s activities, they may make a claim against the organisation. Public liability insurance protects your organisation in the event of these sorts of claims.
What does PLI insurance cover?
A public liability policy will protect a community organisation against its legal liability to pay:
- compensation to third parties (eg. members of the public) for bodily injury and/or property damage that may occur as a result of the community organisation’s activities; and
- the legal costs that a community organisation may incur if it needs to defend bodily injury and property damage claims made against it.
What may not be covered by PLI insurance
When inquiring about public liability cover, your organisation should check whether the policy covers, not only the community organisation, but also its directors, officers, employees and volunteer workers.
Your organisation should also check if the policy extends to include psychiatric injuries (including nervous shock) and loss of use of property (other than through actual damage to that property).
Your organisation should carefully read the terms of any public liability policy it is considering, but most public liability policies will not cover the following:
- claims for injury to a volunteer working for the organisation - this should be insured separately, under a personal accident or volunteer insurance policy (see below).
- claims for damage caused to property in a community organisation’s custody or control - this should be insured separately under a building and contents insurance policy (see below).
- claims arising from negligent advice or negligent provision of some other service - these should be obtained separately, such as professional indemnity or directors and officers insurance policies.
Directors and Officers Liability Insurance
Under a Directors and Officers liability insurance policy (pdf, 1.13MB) (often called ‘D&O’ insurance), the members of the Board or Committee of Management (and other ‘officers’) of a community organisation may be insured against legal liability, including damages and legal costs, if they are sued for certain wrongful acts.
Wrongful acts can include negligently giving wrong advice, requesting someone to perform a dangerous task, dismissing staff without proper authority or process, discriminatory conduct and misleading or deceiving the public in some way.
Directors and officers will only be covered if the wrongful act committed was within the scope of their position in the community organisation.
Incorporated Associations must indemnify its office holders under the Associations Incorporated Reform Act 2012 (Vic) and you may wish to consider Directors and Officers Liability insurance depending on your risk profile.
Occupational Health and Safety
Not-for-profit organisations have the same obligations as any organisation to ensure the people working for them are safe.
The purpose of the Occupational Health and Safety (OHS) laws is to protect the health, safety and welfare of employees and other persons who are at, or come in to contact with a workplace. The laws set out various duties that organisations and individuals must comply with in the workplace. The laws are regulated and enforced by a Victorian government authority known as the Victorian Worksafe Authority (WorkSafe). Worksafe may prosecute organisations that breach (do not comply with) the OHS law duties that they are required to comply with.
WorkSafe Victoria is the best place to go for information about your obligations to keep the workplace safe.
For comprehensive information, see Not-for-profit Law's Guide to OHS Laws (pdf, 1.79MB). This includes information on:
- how OHS laws apply to not-for-profit community organisations
- OHS specific duties
- who may be legally responsible under Victoria OHS laws and what liability can flow from breaches of OHS
- steps to comply with Victorian OHS laws and other employee safety obligations
- what to do if there is a workplace incident - initial response and notification requirements, and
- powers of the Victorian WorkCover Authority.
Not-for-Profit Compliance Support Centre: