Charities specialist WRS Insurance Brokers has reported a sharp rise in legal expenses claims alongside sustained property losses, identifying both as the main insured risks facing UK charities in 2025.
Based on more than 50 charity insurance claims handled last year, WRS found legal expenses and property damage each accounted for 38% of total claims. Legal expenses nearly doubled as a share of the portfolio, rising from 19% of total claims in 2024 to 38% in 2025, while property losses remained the costliest exposure with an average cost of £9,866 per incident.
The Association of British Insurers has reported that UK insurers paid out a record £585 million for weather-related damage to homes and possessions in 2024, a 28% year-on-year increase, illustrating the broader claims environment charities are operating in.
Legal expenses claims were the fastest-growing category in WRS’s data, rising from 19% of total claims in 2024 to 38% in 2025. These most commonly arose from employment disputes, contractor or supplier disagreements, and governance or regulatory matters.
While individual legal expenses claims tend to be lower value than major property losses, their growing frequency reflects increasing regulatory and operational pressures on charities. The Charity Commission’s latest sector risk assessment highlights workforce costs, complex commissioning arrangements and heightened scrutiny of governance and financial management as key risks for trustees. Regulators have also noted rising volumes of reportable issues and serious incident reports, adding to the compliance burden on boards.
Property damage also accounted for 38% of total claims in WRS’s 2025 dataset, with an average cost of £9,866 per incident. The most common causes were burst pipes and water leaks, representing 10.9% of all claims, followed by theft at 9.1%. Accidental damage, storm damage and general property damage each made up 5.5% of claims, with glass breakage at 1.8%.
Although storm-related claims fell from 10% in 2024, property-related losses remained a major driver of overall claims activity. Across the wider market, analysts expect UK property insurance claims to reach around £6.1 billion in 2025, the highest annual payout on record, with weather-related events accounting for a significant share of the total.
Many charities operate from older, multi-use or community buildings, which can be more vulnerable to escape-of-water incidents and opportunistic theft. In a sector where reserves are often thin, unexpected repair costs can quickly translate into service disruption. Government data showed that while total charity income has increased in recent years, staffing levels have fallen, underlining the squeeze on resources and the limited capacity many organisations have to absorb shocks.
Employers’ liability, public liability, professional indemnity and business interruption claims represented a smaller proportion individually in the WRS sample. Taken together with property and legal expenses, however, the data confirm that everyday property and liability risks remain the most significant insured exposures for much of the sector.
The findings come against a challenging backdrop for UK civil society. NCVO’s Civil Society Almanac reported that while overall sector income has grown in real terms, charities face rising demand, higher operating costs and a changing funding mix, with pressure particularly acute for small and medium-sized organisations. The Charity Commission’s latest analysis similarly noted that many smaller charities are struggling with increased employment costs and reductions in the value of local authority contracts.
In that context, WRS’s data suggest that relatively routine perils – burst pipes, theft, human resources disputes and contractual disagreements – can carry outsized consequences for service delivery if not anticipated and managed.
WRS highlighted measures to reduce burst pipe and water damage claims, including insulating exposed pipework, draining systems during prolonged closures or colder months, and carrying out regular inspections and maintenance.
To prevent theft, the broker pointed to the value of maintained intruder alarms and CCTV where appropriate, secure doors, windows and outbuildings, and keeping high-value items out of sight with accurate asset records.
On legal risk, WRS stresses the importance of clear employment contracts, up-to-date HR policies and governance procedures, as well as early engagement with insurers or legal helplines as soon as an incident arises.
That approach mirrors regulatory guidance, which encourages trustees to document decisions clearly and report serious incidents promptly to limit harm and regulatory escalation.
“Simple preventative measures, such as regular building checks, clear governance processes and early access to legal advice, can make a meaningful difference. Understanding where claims most commonly arise allows charities to take practical steps to reduce risk and ensure their insurance arrangements remain fit for purpose," said Emma Jeffery (pictured), senior claim executive at WRS Insurance Brokers.
