Charity Donations Indemnity Policy (CDIP)
When companies hold funds on deposit and are unable to locate the owner to return these to, the funds may sit dormant in their accounts for many years. An alternative is for these funds to be donated to charity, for which they provide a valuable source of income.
Charities enrich the lives and experiences of many individuals throughout the UK. They provide respite care, support during challenging times or through illness, relief from homelessness and the funding of medical research to improve future healthcare, to name just a few good causes. However, charities always need further funds to continue their good work, and that is even more apparent in the current economic climate with rising inflation and more people seeking support than ever before.
However, whilst in all likelihood these funds for whom the original owner cannot be found, may never be claimed, under The Limitation Act 1980 (opens a new window) the original owner of the funds can ask for the funds to be returned, for a period of up to six years. This leaves both the donor of the funds and the charity to whom they donated the funds at risk of needing to return money they have almost certainly already spent.
Working with one of the leading property charities to establish a way in which this risk could be managed, and one of the leading insurance companies, we are delighted to offer this new product which is currently exclusive for Lockton clients: a Charity Donations Indemnity Policy (CDIP).
Who is this product aimed at?
As, ultimately, either the donor company or charity can be pursued for the return of the funds, we have aimed this product at both types of organisation, with separate and bespoke “Payer” and “Payee” policy wordings.
On the “Payer” side, the product is aimed at the organisation donating to the charity (currently restricted to RICS and SRA members). The Payee is the charity receiving the funds.
What are the benefits to the policyholder?
The policy will indemnify the insured for any amounts that need to be repaid to the original owner of the funds, delivering the following benefits:
Security for those donating charitable funds in the event they are required to return them, potentially enabling them to make donations available for charitable use sooner than would otherwise have been the case.
Managing the risk of unexpected requests for funds to be returned to the original owner(s), leaving the charity in a difficult position.
Providing valuable risk management and ‘peace of mind’ for a very modest premium.
Who do I contact for further information?
If you are interested in purchasing this product or require further information, please contact Toni Longman, Ian Blackadder, Rosie Ratcliffe or Marcus Potter.