Charity Shop Insurance

March 06, 2018 Alyson Pepperill
Charity Shop Insurance

According to statistics released as part of the Charity Shops Survey 2017, things are changing for charity shops. Once a high street staple, these outlets are suffering from two main problems; rising costs related to staffing and running the shops and a drop in the number of people volunteering.

The figures speak for themselves - for the first time in 17 years, there has been no increase in the overall number of charity shops in the UK. In fact, all 76 charities that responded to the survey have opened the exact same number that they have closed.

According to the survey, the cost of hiring charity shop staff has risen sharply as well, not least due to the National Living Wage leading to a cost increase of 3.2%, making the average salary now £16,411. To further highlight the point, the amount of paid workers per shop is the highest it has ever been, at 2.15%.

As we mentioned earlier, the decline in the number of volunteers is also a big factor in the current state of charity shops. The survey revealed that average volunteer levels are at their lowest point for five years, measuring 3.45% less than the year before. This could be down to the additional requirements placed upon volunteers, such as background checks and additional paperwork, or it could be a result of a generational shift, with those in their 60s not wanting to take on the roles.

So if your charity has charity shops, what can you be doing to manage risk and protect your assets? With the landscape so uncertain, ensuring you have the right insurance in place is a good place to start. This will help to protect your assets and indemnify against any potential liability claims.

Often, shop insurance can be found as part of a main Property and Liability package, although smaller charities may opt to purchase a separate shop package policy.

The next question is what type of insurance should you consider? With so much choice available, it can be tricky to know what’s suitable and relevant. We’ve outlined some of the main packages below to get you started:

Property Insurance

Your charity shop will have contents and stock that will need insuring, whether you own or just rent the building it’s in. The question of stock is an interesting one in that it may consist of new and donated goods. There is an argument to be had on whether you insure the donated stock (new items should be insured at the replacement value). It is worth noting that some charities do select to insure each bag at a nominated amount, whilst others don’t on the basis that the goods are usually of a low value and can be replaced at a low cost anyway.

Business Interruption Insurance

This is something to consider should an event take place at your property which means you can’t open your shop. This can lead to a loss of income which could affect the profitability of the shop and the contribution it makes to the charity’s income. If the shops are profitable, you may want to consider insuring against ‘Loss of Income or Gross Profit’. Alternatively consider an ‘Additional Cost of Working’ basis of cover if the real cost to you is more likely than the additional costs incurred whilst the shop remains closed or where you need to open the shop in a new location.

Money Insurance

This insurance covers any money that is stolen from the shop or in transit to/from the shop and the bank. In addition to this, Personal Assault is usually offered, which will compensate employees who are injured as a result of a robbery. 

Employers’ Liability

Employers’ Liability insurance will cover your charity for any damages and legal costs should you be accused of causing injury to an employee or in certain circumstances a volunteer through your negligence.

Public Liability

This will cover your charity for damages and legal costs if you are accused of negligently injuring a volunteer, customer or any other person on your premises that is not an employee, or to causing damage to their property.

 Products Liability

Finally, products liability will cover your charity for damages and legal costs if you are accused of negligently supplying a product that causes injury or damage to volunteers, customers and other persons on your premises.

For more information around the charity shop landscape, please read our associated technical bulletin, and for any further advice on insurance packages, visit our website.  The sole purpose of this article is to provide guidance on the issues covered.



This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.