What is Association Liability Insurance?
Association Liability Insurance is tailored protection for not-for-profit organisations, clubs, committees and community groups. It’s designed to cover both the entity and its office bearers—like presidents, secretaries and treasurers—against claims that arise from how the association is run.
Even if decisions are made in good faith, committee members can be held personally liable for mismanagement, poor governance, employment disputes or errors in advice or advocacy. This policy helps protect the people who volunteer their time, as well as the reputation and financial stability of the organisation itself.
Association Liability Insurance typically combines several key protections into one policy, including Directors and Officers cover, Professional Indemnity, Employment Practices Liability, and optional cover for crime, fines and tax audits.
If your association runs events, provides training, applies for grants or manages volunteers, this cover helps safeguard your leadership team and ensure the group can keep operating with confidence.
What Association Liability Risks Are There?
Running an association or not-for-profit comes with a unique set of responsibilities—and just as many risks. While many people assume these groups fly under the radar, the reality is that legal claims, internal disputes or regulatory breaches can cost thousands and put the entire organisation at risk.
Here are some of the most common risks Association Liability Insurance can help manage:
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Mismanagement of funds – Claims from members or donors alleging poor financial oversight or misuse of resources.
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Volunteer or employee disputes – Allegations of harassment, unfair dismissal or discrimination—even when no one is on payroll.
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Incorrect advice or advocacy – Claims arising from training, publications or policy recommendations made in good faith.
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Breach of duty by office bearers – Personal liability for committee members who unknowingly breach legal or governance obligations.
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Theft or fraud – Internal loss of funds due to dishonest actions by a volunteer, staff member or third party.
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Regulatory investigations – Fines, penalties or audit costs triggered by non-compliance with legislation (e.g. WHS or Fair Work).
Even small, community-focused organisations can be exposed to these types of claims. The right insurance gives your team confidence to lead without fear of personal or financial consequences.
What Does Association Liability Insurance Cover?
Association Liability Insurance combines several important protections into one policy, helping cover both your association and the individuals who help run it. Here’s what’s typically included:
Office Bearers (Directors & Officers) Liability
Protects committee members, directors, and office bearers against claims of wrongful acts made while managing the association.
Example: A member alleges financial mismanagement by the treasurer and seeks compensation.
Association Reimbursement
Covers the association when it indemnifies its committee or board members following a claim.
Example: Your club reimburses a president’s legal defence—this policy reimburses the club.
Professional Indemnity
Covers the organisation for allegations of negligence, errors, or omissions in the advice, training, or services it provides. More about Professional Indemnity.
Example: A peak body publishes guidelines later found to be incorrect, resulting in a member complaint.
Employment Practices Liability
Responds to employment-related claims such as harassment, unfair dismissal, or discrimination—even if the worker is a volunteer or contractor.
Example: A volunteer alleges bullying by a supervisor and lodges a formal complaint.
Crime / Fidelity Cover
Protects against theft, fraud, or dishonesty by staff, volunteers, or outsiders.
Example: An internal bookkeeper misappropriates grant funds over several months.
Why Associations Need This Cover
If your organisation relies on volunteers, provides advice, runs events, or handles funds—you face real risk. Association Liability Insurance is not just “nice to have”; it’s essential protection for your people, your reputation and your operations.
Here’s why more community groups, clubs and not-for-profits are taking out this cover:
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Personal liability is real – Committee members can be held personally responsible for decisions made in good faith.
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Legal action is expensive – Even if a claim has no merit, defence costs alone can drain your resources.
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Grants and venue hire often require it – Many funding bodies and councils won’t work with uninsured groups.
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Volunteer disputes are increasing – As compliance obligations grow, so do the risks of internal or external complaints.
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Financial losses can cripple your mission – A single incident of fraud or a discrimination claim could set your work back years.
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Peace of mind for everyone involved – Volunteers, donors and members want to know their organisation is protected.
Whether you’re running a small community choir or a nationwide charity, this policy helps protect the people who keep your organisation running—and the cause you stand for.
Professional Indemnity Insurance vs Association Liability Insurance
These two types of insurance cover very different risks, and many associations need both.
Association Liability Insurance protects your committee members and the organisation itself against claims of mismanagement, wrongful acts, employment disputes, or financial loss caused by your governance or advice.
Public Liability Insurance, on the other hand, covers your group if someone is injured or their property is damaged due to your activities—like during events, fundraisers or day-to-day operations.
Example:
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If a member trips at your event and breaks their wrist → Public Liability responds.
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If a volunteer claims they were unfairly dismissed by your committee → Association Liability responds.
Both are important. Public Liability covers physical harm. Association Liability covers legal and financial harm caused by decisions, disputes, or internal issues.
If you’re unsure which cover your group needs, we’re here to help you find the right fit.
Grace Insurance Brokers
At Grace Insurance, we care about your success as much as we care about our own. That’s why we take the time to understand how your association works—so we can tailor cover that fits your people, your risks, and your goals.
With over 20 years of experience working with not-for-profits, charities, community clubs, and member-based organisations, we know that no two groups are the same. Whether you’re applying for funding, growing your membership, or managing volunteers across multiple locations, we’ll help you protect what matters most.
We’re here to help you with all your insurance needs—without the jargon or the hard sell. Just expert advice, clear guidance, and cover you can rely on.
Speak to a broker today and find the right solution for your association.