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Believe it or not, the United Kingdom is among the most charitable nations in the world. Every day, millions of people across the country give their money and time to one or more of around 196,000 charities. Each of these organisations is run by a board of trustees who, together, make important decisions about the charity’s work, such as how to spend its money and what its objectives are.
But with great power, comes great responsibility…
There are over 1 million trustees in the UK and each one must uphold certain duties according to charity law. These include using reasonable care and skill in their work, ensuring funds are used wisely and lawfully, and making sure the charity and all its activities complies with the legislation. Failure to do so can result in legal action, and a trustee can be held personally liable for any debts or losses the charity incurs. While there is no legal protection against dishonest, reckless or negligent behaviour, if a trustee makes an honest mistake, they could be financially protected by the charity’s insurance.
Charities can be confident that their assets, and future, are in safe hands by reducing the risks of their trustees falling foul of the law. Here are a few tips to prepare, and protect, those in power:
Trustee Indemnity Insurance protects trustees from personally paying the legal costs and settlements from a claim made against them. It also protects the charity itself from corporate liability. Charities can also get Directors & Officers (D&O) cover, which gives similar protection to other managers. But remember, neither policy will cover a person convicted of fraud, dishonesty or reckless conduct. And because of the wide range of roles these policies can cover, it is best to check that the policy wording definition of "insured person" is wide enough to capture them all.
The best way to arrange appropriate protection is through a specialist insurance broker, and our team of experts at Unity Insurance Services would be happy to talk through your charity’s needs.