Last year a small community group in regional Victoria hosted their annual winter market. Maybe 200 people through the door over the course of the day. A child tripped near one of the stalls. Needed stitches. Parents were upset, understandably. Then came the claim.

The organisation had public liability insurance. Had it for years. But when their broker actually read through the policy — properly, not just the summary page — it turned out that the cover had a specific exclusion for temporary events at third-party venues. The market was held at a showground they'd hired for the day.

Claim denied.

The legal costs that followed nearly closed them down. A group that had been running community programs for eleven years, gone — over something entirely preventable.

I'm not telling that story to frighten anyone. I'm telling it because it's real, it's not unusual, and it's the kind of thing that almost never gets talked about until it happens to someone you know.

So what actually is public liability insurance not for profit?

At its most basic — if someone gets hurt, or something of theirs gets damaged, because of something your organisation did or didn't do, public liability insurance is what pays for it. The legal defence. The compensation. The settlement negotiated somewhere down the track when everyone just wants it over.

What it doesn't do — and this is where people get into trouble — is automatically cover everything your organisation does just because you hold a policy.

The devil, as they say, is absolutely in the detail.

Here's what I've seen catch NFPs out repeatedly.

Venues. If you run programs or events anywhere other than your own premises, check whether your policy actually follows you there. Many don't. Some specifically exclude hired or third-party spaces.

Food. Preparing it, distributing it, selling it at a fundraiser. If your policy doesn't specifically address food liability, you may have a problem if someone gets sick.

Volunteers driving. Someone using their own car to transport clients, deliver goods, pick up donations. Is that activity covered under your policy? Probably not automatically.

Kids. Any program or activity involving children needs to be explicitly covered — not assumed, not implied. Explicitly covered.

These aren't edge cases. These are things that happen in the normal course of running a community organisation every single week.

The limit matters too.

A million dollars sounds like a lot. It isn't, necessarily, when you're facing a personal injury claim with years of ongoing medical costs attached to it. Most NFPs doing active community work should probably be sitting at five million minimum. The premium difference is usually modest — far more modest than most people expect.

Here's my honest take on this.

Most NFPs renew their insurance every year without looking at it. The renewal notice comes in, the premium gets paid, everyone moves on. It's understandable — there are a hundred more urgent things to deal with.

But insurance that hasn't been reviewed in three years isn't insurance that reflects your organisation today. It reflects what your organisation looked like three years ago. If you've added programs, changed venues, grown your volunteer base, started working with different populations — your risk profile has shifted and your policy probably hasn't.

A proper review with someone who actually knows NFP insurance doesn't take long. An afternoon, maybe less. What it gives you is actual certainty instead of the assumed certainty that most organisations are operating on.

There's a difference between thinking you're covered and knowing you are.

Most NFPs are living in the first camp. They find out which one they're actually in at the worst possible moment.

ACS Financial specialises in insurance for not for profit organisations, charities, and faith-based groups across Australia. They've been doing this work for more than 30 years and offer a free NFP insurance health check — no obligation, no sales pressure, just a proper look at whether your cover is actually doing what you think it is. Visit their website to get started.