Insurance for Charitable Organisation

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Q: As a registered charity, we have to take out insurance for the building and public liability cover. One aspect of that insurances is that it covers the trustees in case of death. One of our trustees has passed away and we now have a dilemma, can we make a claim against that insurance as he was covered by the insurance? We did not knowingly take out the insurance for the cover, we only found out after wards when we were reading the small print and cover.

A:
There are numerous charitable organisations and committees that operate mosques and Madresas, and none of them ever needed to take out insurance. This is, therefore, not a necessity. Insurance is Haraam because it involves interest and the element of chance, which is a factor found in gambling.

From an Islamic point of view Waqf property does not need insurance because should anything happen to the property, which was not due to the fault of the trustees, no one is responsible or liable. If a trustee or more are guilty of actions that caused damage or loss then they will be held responsible. Sometimes by taking out insurance on Waqf property, the door is opened to abuse or unwarranted risk-taking by unscrupulous trustees and members.

Your duty is to cancel the insurance with immediate effect. Furthermore, no claim is permissible against the death of the one trustee, for any money received thereby will be Haraam and may not be used for any Deeni purpose.

And Allah knows best

Mufti Siraj Desai