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Trustee indemnity insurance
Protection for your key people
Do right by your decision-makers
Your trustees give their time to support your charity or not-for-profit and its mission. They’re essential to how your charity functions, day to day.
But what if they make an honest mistake in their role that leads to a legal dispute or a call for compensation? By protecting them with trustee insurance, if they are sued for these alleged mistakes, these costs are covered.
This is important, because without insurance they'd be personally liable to pay these potentially high costs out of their own pocket. It could also cause major reputational damage to them and your organisation.
What is trustee indemnity insurance?
Trustee indemnity insurance, or trustee liability insurance, is a type of financial protection for those who lead and run your charity. These are the people who make the financial, legal, or other decisions. So that’s trustees, directors, governors, committee and board members, and officers.
With this cover in place, if they make alleged mistakes in the course of their statutory duties, they’re financially protected for that accusation.
What does trustee indemnity insurance cover?
Trustee indemnity insurance covers individuals in senior positions for accusations of wrongful acts while doing work for your charity. This may be in dealings with staff, the charity’s property, funders, or contracts to deliver services or goods. Our policy provides cover up to £5m.
Accusations covered include alleged:
- Breach of duty, breach of care, and breach of health and safety
- Negligence, errors and omissions, and defamation
- Breach of contract, wrongful or unfair dismissal, discrimination, and other employment issues
- Fraud and dishonesty (legal defence costs)
Costs covered can include legal and compensation costs, along with Charity Commission investigations.
It’s important to know that this covers trustees acting in good faith. It doesn’t cover trustees who knowingly or deliberately carry out wrongful acts.
Cover for your organisation
You’ll also receive professional advice to support your organisation (and the trustee) to recover from the impact of an accusation.
Fraud and dishonesty cover also protects your organisation for loss of money or items if your trustees, directors, or board members are found guilty of these acts.
Do charity trustees need indemnity insurance?
People in the role of trustee of a public organisation can benefit from this cover. This is because they can be held personally responsible for important decisions made on behalf of the organisation. They could also be personally sued or prosecuted for any mistakes and their consequences while they carry out their statutory duties.
It’s also important to remember that trustees can be volunteers. So they may not have much PR or administrative experience. Putting this cover in place, including crisis management support, can take a lot of the pressure off those giving up so much of their time to support your organisation.
Claims you can count on
Our in-house claims service, and close relationships with insurance partners, make for an easy and efficient process. We’ll be by your side throughout, ready to answer your questions and keep things moving.
✓ In-house specialists with deep sector and insurance knowledge
✓ Here when you need us in person, by phone, or email
✓ Timely, clear, and concise communications
Trustee indemnity insurance FAQs
Trustees have a duty to protect a charity’s assets and manage its exposure to risk. Having insurance in place is an easy way for a trustee, director, or officer to make sure they’re fulfilling this duty.
Trustee insurance can also provide invaluable support in dealing with the aftermath of a claim. This can include reputational damage and legal proceedings.
We can also extend the policy to include claims made against the organisation.
One of your trustees writes an article about another charity that works in your sector. In response, the charity sues for alleged defamation. They claim the article contained untrue statements about their organisation’s goals.
Under these circumstances, trustee indemnity insurance would provide cover for legal defence and compensation costs. You’d also get professional support to help reduce the impact on the trustee’s (and your charity’s) reputation.
Yes, trustee indemnity insurance covers your organisation if it loses money or goods due to dishonest or fraudulent acts by trustees, directors, or board members.
They are essentially the same. The key difference is that directors’ and officers’ insurance is designed for businesses, while trustee indemnity is geared towards charities, community groups, and not-for-profit organisations.
The level of trustee indemnity cover you need depends on a few factors. Our expert broking team can advise you on this. Try to have the following information to hand when you get a quote:
- How many trustees, directors, officers, and board members does your charitable organisation have?
- What is its gross annual income?
- What type of organisation is it (e.g. a conservation group or an education group)?
- How many volunteers and employees are there?
- Do you have any third-party contracts?
- Do you operate overseas?
- Who are your service users (e.g. are they children or vulnerable adults)?
