A look at how the pandemic affected UK nonprofits' insurance costs, volunteer base and more

Author: Sarah Smith


Having recently reached the two-year milestone of the global coronavirus pandemic being recognized and acted on in the UK, nonprofit organizations continue to focus on what a post-pandemic world looks like, both in terms of the sector generally and also individual non-profits.

The key messages for nonprofits as we enter summer 2022 are the need to constantly review and adapt, recruit and retain great people, build a wider support base, be aware of economic factors and continue to fight a good fight and love thy neighbor.

It's time to review pandemic-driven adaptations

A number of organizations adapted and evolved to ensure their survival, including relinquishing properties, moving to a work-from-home model and delivering face-to-face services remotely. Some diversified activities based on the changing needs of the public or where they knew they could secure funding.

Now organizations need to decide what worked, what didn't, and whether the organization should revert to pre-pandemic working patterns or embrace the changes and the new norm. The answer and best solution will vary significantly from organization to organization, but the key is that a review takes place.

The effect of a challenging job market on nonprofit Employer Liability costs

The demand for good employees far outweighs the supply, with nonprofits being one of the sectors hardest hit. Organizations now have to sell themselves to potential employees and look carefully at what benefits they offer above and beyond pay — including flexibility, wellbeing and childcare support and time off. The nonprofit sector is bringing itself much more in line with the commercial world. This realignment has a time and financial impact.

From an insurance perspective, the main rating factor insurers use to determine premiums for mandatory Employers Liability insurance is wages, so increasing pay contributes to increasing insurance costs.

The insurance industry sees that high staff turnover and increased use of agency workers directly correlates with more Employers Liability claims, which could also influence insurance costs.

From an insurer's perspective, it's important that insurance brokers get across that a stable workforce of direct employees with a low staff turnover will generally help to drive the best premiums for Employers Liability insurance.

Restoring the nonprofit volunteer base

Unpaid volunteers offer much needed support to a large number of non-profits in the UK. According to the NCVO's UK Civil Society Almanac 2020*, people aged 65 to 74 are most likely to regularly volunteer at least once a month in the UK. This age group was heavily affected by the pandemic during 2020 and 2021, with a number falling into at-risks groups for which shielding was required, making them unable to volunteer.

Now organizations need to attract regular volunteers and build bases of support. The one exception is nonprofits operating in essential key services including the healthcare industry, where there has been and continues to be a huge degree of empathy and support from the public. According to the NCVO's Almanac, the UK National Health Service (NHS) Volunteer Responders program received a staggering 750,000 volunteer applications at the height of the pandemic.

Real cost of rising inflation

While not the only drivers, the pandemic together with the UK's exit from the European Union — Brexit — have contributed to some of the highest inflation nonprofits have seen for years. This inflation impacts so many factors; from an insurance perspective, it has contributed to insurance rates continuing to rise — or rather, to not fall following the quickly hardening insurance market we saw in the middle of 2020.

Non-profits that own buildings are among the hardest hit, because the rate of index linking insurers are applying exceeds 10% for the first time in over 20 years.

There is a growing concern around organizations being underinsured on their buildings. It's common in the UK for property insurers to have underinsurance provisions that apply average in the event of underinsurance. It's more important than ever that nonprofits monitor their asset registers, have professional building revaluations and monitor the rising costs — and check in with their insurance brokers to ensure they have up-to-date values insured and are getting the best professional advice.

War in Ukraine and a groundswell of support for our neighbours

The war in Ukraine has seen more nonprofits than ever react to the call for help in the face of an international crisis. That reaction has included everything from fundraising, to collecting supplies, to looking at opening buildings to accommodate refugees entering the UK, to physically sending employees and volunteers into Ukraine.

The challenge for insurance brokers is keeping up to date with changes and ensuring their nonprofits are placed with empathetic insurers who not only see the risk but understand of why organizations want to get behind this cause, with a can-do attitude of how the insurance program can adapt and respond.

As you contend with all the factors affecting nonprofits — the pandemic, tight labor market, diminished volunteer base, inflation, and Ukraine conflict — keep in mind that it's a must to work with a professional insurance broker with nonprofit expertise who can advise and help nonprofits navigate the changing UK insurance landscape.

Author Information


*Hornung, Lisa, Oliver Chan, Veronique Jochum, Marc Lawson, Amy McGarvey, Keeva Rooney. "The UK Civic Society Almanac 2020," NCVO, Jun 2020.


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