Trustees are volunteers with big responsibilities and also some potential risks. The trustee role includes those work at a charity as a governor, director, committee member, officer, or any other kind of key decision-maker.
According to the Charity Commission in their 2017 report into Trustees in the charitable sector “trustees are the stewards of over £75 billion charity income each year and lead the way in ensuring the 167,000 charities on our register deliver on their mission”
Trustees provide a vital service to charities and community groups, they protect their best interests, they ensure that the organisation is acting lawfully and responsibly and assist with the charities governance.
All trustees should have suitable insurance in place, if a trustee does something in error or makes the wrong decision this can put them at risk of compensation claims, legal action or official investigations, which may be directed at them personally.
What is trustee insurance?
Trustee indemnity insurance will protect trustees against claims, and the cost of defending claims, made against them for a breach of their duties, a breach of trust or negligence made in their role as a trustee.
The insurance provides similar cover to Directors & Officers Liability insurance however it is specifically designed for trustees of charities, social enterprises or voluntary groups.
Please feel free to give us a call to discuss the specific of your role and we will be happy to advise on the most appropriate protections for you and your charity
What does trustee liability and indemnity insurance cover?
Trustee insurance protects individuals from having to pay out of their own pocket for legal claims that are made against them. These claims can include:
- breach of trust
- breach of fiduciary or statutory duty
- wrongful acts
The policy protects you against fines and compensation claims as well as legal costs arising from claims.
What are trustees liable for?
Trustees can be held personally responsible for more than simply financial irregularities. If, for example, the trustee of a community group issued a press statement that contained potentially libellous comments. Any legal proceedings arising as a result would almost certainly be directed at the individual trustee rather than the charity. This might lead to a potentially substantial legal bill for the trustee, whether the allegations had any merit or not.
Trustees may also be held responsible if they did not intervene and stood by whilst another trustee acted inappropriately.
Do trustees need insurance?
At the heart of it, trustees are there to protect a charity’s assets. While it’s not a legal requirement, having insurance in place is the best way to protect both the trustee and the charity, should something go wrong or a mistake made, we’re all human after all.
You must be at least 16 years old to be a trustee of a charity that is a company or a charitable incorporated organisation (CIO), or at least 18 to be a trustee of any other charity it is important that individuals understand their personal exposure should the charity or individual not have adequate protections (insurance) in place.
Why choose Stanmore for trustee insurance?
According to the UK Government “It is usually best to use an insurance broker who has an understanding of charities’ insurance needs and who is in a position to place business with any one or more of a range of insurance companies.”
Stanmore Insurance Brokers works with a wide range of charities and community groups, helping them ensure they have the protection they need for both the charity and their trustees.
Each of our clients has a dedicated account handler on hand to support them and guide them through the insurance and if needs be the claims process. You will have a direct phone number for your account handler so should you need anything, they are just a phone call away.