Town and parish councils play an important role in supporting their communities, but they also face a wide range of responsibilities and risks. From maintaining playgrounds and village halls to running events and even potentially taking on broader responsibilities, they are managing more liability, property and operational risk than ever, often with a small team and limited resources.
Local council insurance sits at the centre of that responsibility. Whether it's a small parish council or a developing town council, getting it right means making sure insurance arrangements evolve alongside the council's changing assets, activities and responsibilities.
What risks do town and parish councils face today?
Town and parish councils face a broader risk landscape than most people assume, ranging from property damage for any buildings they own or manage to liability for health and safety in community spaces such as parks or playgrounds.
Liability may also arise from public events organised by councils, while forthcoming duties under the Terrorism (Protection of Premises) Act 2025, commonly known as Martyn's Law, may affect councils responsible for qualifying premises or events.
Meanwhile, councils that hold or manage residents' data may find themselves exposed to cyberattacks. Effective council risk management requires regular monitoring and review of all these risks — rather than ticking a box once a year.
Cyber insurance: Do parish councils need it?
Any council that holds resident data, handles payments or manages correspondence digitally carries cyber risk.
Many local councils have only a single clerk handling council business without dedicated IT support and often lack the funds to hire a full-service IT firm. There may be security gaps that antivirus software alone cannot close — so having a broader plan for cyber risk management is essential.
Cyber insurance can form a part of a broader cyber risk-management approach. But it is not a substitute for appropriate security controls, staff awareness and an effective incident-response plan.
The good news is that help is available. For councils without dedicated IT support, the government-backed Cyber Essentials scheme provides a useful framework of basic technical controls. The National Cyber Security Centre also offers free assessment questions, a readiness tool and practical guidance to help organisations identify gaps1.
Raising awareness among staff and councillors is just as important as the technical side. Staff and councillors need to know how to spot a suspicious email and what to do when one arrives. Short online courses can facilitate this and may be more accessible for those who have neither the time nor the resources for lengthy training courses.
Local government reform: What happens when a council takes on new assets or services?
The Government's programme of local government reorganisation in England is currently under review. Although the future timetable and shape of the programme remains subject to change, town and parish councils may still need to consider the implications of taking on assets, buildings, open spaces or services previously managed by principal authorities. This plan would merge county (top-tier) and district or borough (second-tier) councils together across large parts of England. As of September 2026, these plans are under review but may return in some form2.
While town and parish councils (the third and most local tier) are not directly affected3, they are closely monitoring developments. They may be asked to assume responsibility for buildings, spaces or services that district or borough councils once provided4.
Each transfer presents new duties and new liabilities, and insurance needs to reflect these from the day responsibility passes. Therefore, it's important to consider the risk implications as early as possible.
If informed with plenty of notice, broker and insurer can help councils update their risk assessments and identify any gaps in coverage.
Before taking on any new asset or service, a council needs to understand:
- Who will be legally responsible for the asset or service, and from what date
- Whether a new or updated risk assessment is required
- The condition of any building, land or open space being acquired
- Whether surveys or professional inspections are appropriate
- Whether an up-to-date building reinstatement valuation is required
- Any maintenance or repairing obligations contained within leases or transfer agreements
- How to add new assets to the council's asset register
- Whether employees, volunteers, vehicles, machinery or specialist activities are involved
- Who takes the responsibility for ongoing inspections, maintenance and statutory requirements
- How to notify the council's broker as early as possible, ideally before responsibility transfers
Early discussions give the council, broker and insurer more opportunity to identify potential problems and find an appropriate solution.
How often should councils review their insurance arrangements?
There is no fixed timeframe that works for every council. Reviews usually arise from trigger events, not from the calendar. A new asset, a new service, a building project or an expanding events programme all need to prompt a conversation with your broker before renewal, rather than at the point of renewal itself. The same may apply to a parish council's decision to redesignate itself as a town council, acknowledging the growth of a community, and hence a larger portfolio of assets and services to manage.
Legislative change can provide another opportunity to rethink. Martyn's Law, which will start in spring 20275, introduces new duties for councils managing public venues and events exceeding certain capacity thresholds. This is a clear cue to revisit cover and risk planning now.
How can councils avoid being underinsured?
Avoiding underinsurance comes down to three habits:
- Keeping valuations up to date
- Maintaining an accurate asset register
- Ensuring that liability limits keep pace with activity
For local councils (as for anyone else), insurance is only as reliable as the data behind it. Underinsurance often develops gradually, due to assets that were never revalued or services added without a review of the insurance cover.
Keep rebuilding valuations current. Professional valuations need to be updated every couple of years — perhaps sooner if the council has taken on new property.
Maintain an asset register with an insurance column. This needs to reflect the new-for-old replacement value, not the original purchase price, because the gap between them can widen over time, especially for older assets.
Monitor liability limits against actual activity. As services and events grow, so does exposure. A limit that was adequate five years ago may not be sufficient today.
Conclusion: The importance of dialogue
The most valuable insurance relationships go beyond the policy document. A broker who is familiar with the sector, meets councils regularly and asks the right questions can identify issues that may be overlooked during a standard renewal process.
At Gallagher, we prioritise a proactive approach. We collaborate with our clients in the sector on managing risk — whether that's advice on minimising the risk of falling trees or preventing pipes from freezing in a closed pavilion during winter. That kind of review is hard to do via email alone.
Town and parish councils face complex responsibilities, making it necessary to regularly review risk management arrangements and insurance provision. Councils that manage risk well don't wait for renewal; they connect with their broker whenever something changes.
Gallagher's dedicated town and parish council team combines specialist insurance with practical risk management support tailored specifically for the sector. To arrange a review, you can contact our specialists at community@ajg.com or call 0800 062 2030.
