Welcome to Charity and Trustees Indemnity Insurance

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Charity and Trustees Indemnity Insurance

Why do you need indemnity insurance?

The senior officers and trustees of a charity have individual, personal duties and responsibilities for the management and administration of that charity or association, this brings with it the potential of many liabilities. The fact that many people who give their time ‘free’ to charities, acting in either a management capacity or as a trustee, does not absolve them from these very real liabilities.

There are several publications explaining the duties and responsibilities of a trustee, which the charity commission has produced, giving out details on such things, as protection and investment of charities assets such as property, the requirement of financial information to be prepared and available i.e. charity’s accounts, together with guide lines in respect in respect in respect to employees and agents of the charity, as to how they are monitored.

The structure of a charity, where trustees are appointed and the duties of those trustees are formulated by a deed or document controlling that trust, from statute and from common law should a trustee accidentally be neglectful or be ignorant of these duties this could lead to a ‘breach of trust’ and leave that trustee/s personally liable which may be “unlimited liability”.

The important issue for charities or associations to consider is the potential liabilities and exposure they open their trustees, directors and offices to and itself becomes a ‘duty of care’ particularly to employees of that charity or association.

The best form of protection against potential liabilities and there are many, would be in arrange an insurance policy, however, there are guidelines that you need to perhaps consider - the Charity Commission for England and Wales has summarized these in their publication 'CC49'.

How do you get indemnity insurance?

If your charity's governing deeds / documents do not include a power to obtain trustees insurance cover you will need to obtain an amendment to the governing document to allow you to purchase indemnity from the commissioners, who generally have no objections to the use of charity funds to purchase suitable trustee indemnity insurances.

More recently the Charity Commission has moved towards a self-certification method for charities who are considering the purchase of insurances for their trustees, details can be obtained from the Commission in their guidance notes (Ref: 0G100C4) if required.

Providing the charity purchasing insurance covers can show this to be in the charities best interest, the Commission would rarely have any objections.

Some typical Exposures

  1. Health & Safety – fire safety, electrical and mechanical equipment checks
  2. New (GDPR) General Data Protection Regulations
  3. Dishonesty of trustees
  4. Employment Equality (Age) Regulations 2006 (Ageism)
  5. Racial and sexual discrimination
  6. Employment Practice liability

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