Community groups, sports clubs, charities and incorporated associations are the backbone of Australian communities. They are also exposed to real legal and financial risks that many volunteer leaders do not fully appreciate. A common misconception is that incorporation protects individual committee members and board directors from personal liability. It does not — at least not completely. And without the right insurance in place, a single accident, complaint or fraud event can jeopardise the organisation’s finances and the personal assets of the people running it.
The Risk: Incorporated Associations Can Be Sued
Incorporating your association creates a legal entity separate from its members, which does provide some protection. However, incorporation does not shield the organisation from legal claims, and it does not automatically protect individual committee members or office bearers from personal liability for their decisions.
As the Institute of Community Directors Australia notes, some not-for-profit organisations believe that because they have incorporated, they cannot be sued. This is not the case. A board member of an unincorporated body can be sued as an individual. But even incorporated associations face genuine liability exposure including:
- A visitor, client or volunteer injured at your venue or event
- Defamation claims arising from newsletters, social media posts or public statements
- Employment disputes from paid staff or complaints by volunteers
- Allegations of financial mismanagement or breach of duty by committee members
- Professional negligence claims if your organisation provides advice or services
- Data breaches involving member records, donor information or client files
In Queensland, incorporated associations are specifically required to hold public liability insurance as a condition of operating. In other states and territories it is not legally mandated for all associations, but is strongly recommended and frequently required as a condition of grants, venue hire agreements and participation in peak body networks.
The Covers Your Organisation Should Consider
Key Insurance Covers for Charities, Associations and Community Groups
Public Liability — covers compensation and legal costs if a third party is injured or their property is damaged in connection with your organisation’s activities. Typically the minimum cover for any group that runs events, has a venue, or works with the public. Minimum $10 million is standard for most activities and $20 Million is recommended.
Association Liability (D&O / Management Liability) — protects the organisation and its directors, committee members and office bearers for claims arising from their governance decisions, including employment practices, breach of duty, mismanagement, wrongful acts and regulatory investigations. Community Underwriting’s Association Liability policy specifically includes employment practices cover for NFP boards.
Volunteer Personal Accident Insurance — provides a benefit to volunteers who are injured while performing work for the organisation. Under WHS legislation, organisations have obligations to protect their volunteers, and personal accident cover is the primary mechanism. Without it, an injured volunteer may have no avenue for compensation.
Professional Indemnity — relevant where the organisation provides advice, counselling, training, support services or other professional activities. Allegations of negligent advice can arise even in a volunteer context.
Property Insurance — covers buildings, contents and equipment owned by the organisation, including hired or borrowed equipment used at events.
Fidelity / Crime Insurance — covers loss of money or assets due to fraud, theft or dishonesty by committee members, employees or volunteers. Sadly, internal fraud is one of the most common claims in the NFP sector.
Cyber Liability — increasingly important as organisations hold member databases, donor records and client files. Data breaches trigger notification obligations under the Privacy Act 1988 and Notifiable Data Breaches scheme.
Event Insurance — for organisations that run fundraising events, festivals or one-off activities. Covers event cancellation, public liability and property damage specific to the event.
A Note on Volunteers
Volunteers are not employees, and they are generally not covered by Workers Compensation insurance. However, the Work Health and Safety legislation requires organisations to protect their volunteers from risk of injury — and the responsibility for arranging personal accident insurance sits with the organisation, not the individual volunteer.
If your organisation has large events where volunteer numbers vary significantly, check that your policy covers the maximum number of volunteers you are likely to deploy. Some policies have sub-limits on volunteer numbers that require you to arrange top-up cover in advance of high-attendance events.
Talk to Your Insurance Adviser
The insurance needs of a small community garden group are different from those of a registered charity with paid staff, multiple programs and a significant client base. An Insurance Advisernet adviser can review your organisation’s specific activities, the number of people involved, whether you hold events, and what services you provide — and recommend the right combination of covers at a competitive cost.
Specialist NFP underwriters including Community Underwriting offer tailored association liability products designed specifically for the sector, with features that standard commercial policies do not include. Your adviser can access these markets on your behalf.
Contact Lewis Insurance Services on 07 3217 9015 or send us an email by clicking here.
Disclaimer: This article is for general information purposes only and does not constitute financial, legal or insurance advice. Coverage will depend on the specific terms and conditions of individual policies. Businesses should consult their insurance broker or legal adviser for guidance on their particular circumstances. Information is current as at 3 March 2026 and the situation is evolving rapidly.
This article was published by our AFSL Licensee, Insurance Advisernet Australia P/L, www.insuranceadviser.net