The survey by insurer Royal & SunAlliance, which involved interviews with 200 charities with annual incomes of less than £50,000, found not only that 20 per cent were uninsured, but also that about half believed they were at no risk at all from theft or damage to their property.
Forty-eight per cent believed they were under no threat of being sued by a disgruntled employee, a service user or a member of the public, and 38 per cent did not consider the prospect of an accidental injury at a charity event to be a risk.
Three-quarters believed they were at no risk of falling victim to fraud by an employee or volunteer, and 55 per cent said they were at no risk from breaking the law accidentally.
Gary Johnson, customer development manager at Royal & SunAlliance, said: "This attitude is naive in the extreme." Some charities without any insurance might be acting illegally, he said, because those with employees had to have employer liability cover by law.
Sally Hiscock, implementation manager at the Home Office-funded Governance Hub, said: "I'm surprised at the high number of charities not meeting general insurance requirements. They need to have a better understanding of risk and health and safety issues, especially as society is getting more litigious. The sector needs to wake up to the need to be properly protected."
The survey also found that lack of insurance cover was more prevalent among the smallest charities, with 30 per cent of those with incomes of less than £10,000 being uninsured. Among those surveyed, the preferred source of information was insurance brokers, cited by 27 per cent, followed by websites and advice from charities and charity organisations.
Alyson Pepperill, projects director at Giles Insurance Brokers, said that the findings appeared shocking, but they might be skewed because many small charities do not own their own premises or equipment, which was why they believed they were at no risk.
- A survey by insurer Royal & SunAlliance found that one in five small charities was uninsured and many were naive about risk
- It revealed that half of the charities surveyed believed they were at no risk at all from theft or damage to their property
- Three-quarters said they were at no risk of falling victim to fraud by an employee or volunteer.