Page 10 - ALG Issue 2 2022

The Importance of Incorporation
If the intricacies of incorporation leave you stumped, read on. Adam Taylor, Commercial Lines Manager at Chris Knott Insurance, explains the main differences between incorporated and unincorporated associations and what it means for your allotment association.
Here at Chris Knott Insurance, we work with a wide range of organisations
up and down the country, including non-profits and charities. The subject of protection for individual organisers and managers often comes up, bringing with it questions about incorporation and its benefits.
PERSONAL LIABILITY
The biggest difference between an incorporated association and an unincorporated one is personal liability. If your organisation is unincorporated, it means it’s not a legal entity. The individual members enter into agreements and contracts on the association’s behalf. They also hold its funds and assets personally.
Although this means the association
is quick to set up and organise, it also means that members can be held liable when things go wrong, which puts their personal assets at risk.
For instance, if a member of the public suffers an injury at an allotment association site, the members
could become liable for the cost of compensation.
PROTECT YOUR PEOPLE
If the association is incorporated, however, claims can be brought against the club, which limits individual liability. Members will only be held liable if it can be proved that they acted dishonestly
or unethically. As such, it reduces the personal risk faced by members and managers and provides valuable peace of mind.
In addition, if you’re incorporated, most insurance policies will cover all association members, rather than just the committee. As such, policies
Members will only be held liable if it can be proved that they acted dishonestly or unethically
provide valuable protection for a range of scenarios and risks.
Of course, there are lots of types of incorporation, including becoming a co-operative with limited liability. This is an option that the National Allotment Society can assist with. They can also provide sponsorship for associations wishing to take up this model. It is important to seek legal advice before considering which route to adopt and the NAS can advise further, helping you to understand the roles and responsibilities prior to making any changes. Contact natsoc@nsalg.org.uk.
10 Allotment and Leisure Gardener
FIND OUT MORE
If you have questions about insurance for your allotment association, don’t hesitate to contact the Chris Knott Insurance team on 01424 205001 or visit www.chrisknott.co.uk