Charities’ & Trustees’ Liability

Professional Risk Insurance

Charities’ &
Trustees’ Liability

Trustees and officials of charities and other not-for-profit organisations will often volunteer for the role, accepting an unpaid position. However they often take on responsibilities similar to those of a company director. If the trustee is accused of failing in those duties, they can be held personally liable.

Charitable Trustees Liability Insurance

Trustees, directors, officers, committee members and governors of such bodies can all be held responsible for the decisions and actions made on behalf of their organisation. They could also be sued or prosecuted for any mistakes and their consequences during the performance of their duties. Accordingly, they should consider trustee indemnity insurance. Charities’ & Trustees’ Liability (Indemnity) insurance provides financial protection to the trustees and committee members in the event of legal proceedings or regulatory action being brought against them as a result of their activity with the charity or club. The insurance will cover the legal costs associated with defending such a claim, as well as any damages that are awarded, in line with the policy limits.

Private Trustees Liability 

Cox Mahon also has a great deal of experience in advising on private trust structures.

Professional persons (e.g. solicitors or accountants) as well as lay-persons are often requested to act as trustees on private trusts. Such trusts are often set up by someone (the settlor) for the purpose of holding assets, typically property or money, for the benefit of other family members (the beneficiaries).

Professional people, acting in the capacity as such, often mistakenly believe they have indemnity insurance protection provided by their employer – but this is often not the case. Similar to Charitable Trustees Insurance, this type of policy will provide protection for the individual acting as a trustee should their actions or decisions be challenged.

Charities’ & Trustees’ Liability – In Depth

Charity trustee insurance is a vital tool for safeguarding the invaluable work of non-profit organisations and the individuals who serve as their trustees. As an insurance broker, we understand the complexities involved in ensuring the success and sustainability of charitable endeavours. In this article, we’ll explore what charity trustee insurance entails, why it’s essential, and how it can protect your organisation and its dedicated trustees.

What Is Charity Trustees Liability Insurance?

Charity Trustees Liability insurance, also known as charity indemnity insurance, or non-profit directors’ and officers’ (D&O) insurance, is a specialised policy designed to cover the trustees against claims made against them personally, and thus to protect the personal assets and liability of those individuals serving as trustees or directors within a charitable organisation. These policies are tailored to address the unique risks and responsibilities that come with these roles.

Why Is It Essential?

1. Legal and Regulatory Risks: Charity trustees are subject to various legal and regulatory obligations, including the Companies Act and the Charities Act. If they breach these obligations or make decisions that result in financial losses or harm to the organization, they can be held personally liable. Charity Trustees Liability insurance provides cover in the event of a claim being made against them personally, ensuring trustees are not left financially exposed.

2. Attracting and Retaining Talent: Most registered charities buy some form of Trustees liability Insurance; indeed, they would find it increasingly difficult to attract experienced individuals to take on the responsibilities of trusteeship without adequate protection.

3. Protecting Personal Assets: Trustees have personal liability for any wrongful acts occurring whilst serving as a trustee. Without appropriate Trustees Liability insurance, a trustee’s personal assets, including their home and savings, could be at risk if a lawsuit is brought against them personally.

What Does Charity Trustee Insurance Cover?

1. Legal Defence Costs: The policy covers the legal costs of defending a trustee in case of allegations of wrongful acts, mismanagement, or negligence. This includes lawyer fees, court costs, and settlement expenses.

2. Settlements and Damages: If a trustee is found liable, the insurance policy covers the settlements or damages awarded, ensuring that the individual’s personal assets are not at risk.

3. Corporate Legal Liability: whereas claims are usually made against trustees personally for their actions, it is possible to cover claims made against the charitable organisation itself.

4. Employment Practices Liability: The policy can be extended to protect trustees from lawsuits related to employment disputes, such as wrongful dismissal, discrimination, or harassment claims.

5. Third-Party Claims: Trustees can face claims from third parties, such as donors or vendors. D&O insurance provides coverage for these scenarios.

Choosing the Right Policy

When selecting charity trustees’ liability insurance, it’s crucial to consider the unique needs and risks of your organisation. Working with an experienced insurance broker can help you tailor a policy that suits your non-profit’s specific requirements. Ensure you evaluate policy limits, exclusions, and any additional coverage options that may be necessary.


Charity trustees liability insurance is a vital component in protecting your charitable organisation, its mission, and the dedicated individuals who serve on your board. By providing this insurance, you not only shield your trustees from personal liability but also attract and retain top talent while bolstering your non-profit’s overall credibility. At Cox Mahon, we are here to help you navigate the complexities of charity trustee insurance, ensuring you have the right coverage to secure the future of your non-profit.