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Why you need trustee Indemnity Insurance

26 October 2009

NCi take a look at why charities trustees need insurance and the consequences of not having it.

As a charity trustee you help others but who will help you in the event of a claim being made that you could be liable for? To begin it is perhaps worth looking exactly what charity trustee indemnity insurance is. Put simply, it is an insurance policy that covers a charities trustee against personal liability when legal claims are made against them.

It is important to point out that a claim against a trustee could be made by either the charity itself or a third party. So if we now understand what trustee indemnity insurance is, who or what is a trustee? When we talk about a charity trustee, we mean someone who is responsible for the management or general control of the charity.

So if you are a trustee of a charity, is it vital that you make sure that you are protected personally should a claim be made against you. This is in the main difference between a trustee indemnity insurance policy and a charity insurance policy that your organisation is likely to have. Charity Insurance protects the charity, Indemnity Insurance protects you.

There are numerous circumstances which could result in a claim being made against an individual trustee rather than the charity directly. Circumstances including breach of trust, alleged unfair dismissal, discrimination, defamation and the misuse of trust funds to name but a few. The truth is, we now appear to be living in a more litigious society and as a trustee of a charity, you should really take the necessary steps to make sure you are protected against the unexpected.

The good news is that providing the cost of the trustee indemnity insurance you purchase is reasonable, it is likely that the insurance could be paid for out of charity funds. However, because the purchase of charity trustee insurance will be seen as a personal benefit, you will need to have the proper authorisation before the charity can buy it for you. It is important to remember that if you are responsible for the general control and management of the administration of your charity then you should really consider getting yourself protected through purchasing trustee indemnity insurance.

This can easily be done by a search online for a charity insurance specialist as they are very likely to have access to policies and premiums that a normal insurance broker might not have. Simply visit a search engine like Google, Yahoo or MSN and type in charity trustee insurance, trustee indemnity insurance or even charity insurance and let the experts help you get the protection and peace of mind you require.

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