Trust in your trustee insurance
_ Policy Bee _
As a trustee, you take responsibility for the running of your charity. You manage resources, ensure the charity is accountable and keep its best interests at heart – and that’s just for starters. As one of over 944,000 trustees in England and Wales, you’re not alone.
You give your time willingly, and your organisation is a charity. Surely no one would sue you for making a genuine mistake? Unfortunately, this is not the case. Things do go wrong, and you are personally responsible. This is where trustee indemnity insurance will support you.
What could go wrong?
It is not a legal requirement to have trustee indemnity insurance. But it is sensible. If something goes wrong, and someone says it's your fault, you can be liable. And it's not just trustees that need it. Any key decision-makers – such as trustees, directors, governors, committee members and officers – will also be covered under a policy.
· Remember Kids Company? Six years after closing, it is still making the news. On a smaller scale, if you have successfully fundraised for one project, but then spent the money on something else, you could be sued for misuse of funds.
· Are you a dab hand at social media? You hear a relevant celebrity story, you’re in a rush and don’t fact check before you post on your charity’s social pages. But it isn’t accurate, so could lead to the board being sued for defamation.
· Does your charity own property? If it's not properly maintained and something doesn't comply with Health and Safety regulations, you could be sued. If one trustee has responsibility for this, he or she could be liable if an inspection turns up recurring problems.
· The team is expanding, after a round of interviews, you offer someone a job. But one of the other applicants alleges they were passed-over due to a disability and sue for discrimination.
What is covered?
Quite simply, as long as you are working on behalf of the charity, trustee indemnity insurance will cover all your key decision-makers for:
- Breach of care
- Breach of duty
It also covers your legal and defence costs, which can reach thousands of pounds.
The most important thing to remember is that trustee indemnity insurance protects your personal finances. You're personally liable should anything go wrong, so this ensures that your retirement pot, house and family finances remain safe. It also means the charity’s finances remain secure, and the work you do can carry on.
How do you purchase trustee indemnity insurance?
As a charity, you can purchase a policy that covers all of your trustees. And the Charities Act says that not-for-profits can pay for this insurance out of their funds.
A trustee indemnity insurance policy can be bought online, or over the phone. And you can buy it either directly from an insurer, or through a broker, like PolicyBee.
What other insurance might you need?
You can read our blog post about additional insurance here. But as a summary:
· Public liability insurance covers your charity for any bodily or property damage arising from slips, trips, falls and other mishaps said to be your fault. It covers events and fundraisers too.
· Employers' and volunteers' liability insurance covers your employees, volunteers and helpers if they're hurt or made ill by doing what they do for you. It's legally required if you have staff.
· Property and contents insurance covers your equipment and kit if it's lost, damaged or stolen, including portables like laptops and cameras.
· Cyber insurance pays to get you quickly back on your feet after a cyber-attack or data breach. It helps deal with the fallout too.
· Legal expenses insurance covers you for legal disputes including employment, tax, debt recovery and contractual issues.
· Events insurance covers your event should something unexpected happens. Public liability insurance covers some elements, but it’s worth checking the wording.
If you have any questions about insurance for charities, give the PolicyBee team a call on 0345 222 5370. Or you can visit their website policybee.co.uk/fsi for more information