Trustee Indemnity Insurance Guide

What is trustee indemnity and how can it protect me individually whist acting on behalf of a charity

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An expert guide to understanding trustee indemnity insurance for charitable and non-profit organisations

Below you will find an expert guide on trustee indemnity insurance, otherwise known as trustee liability insurance. We can identify what the covers do and how they protect yourself from acting on behalf of an organisation or charity.

As a Willis Towers Watson Network insurance broker, we are experts in arranging trustee indemnity cover to protect against the personal liabilities of board members and senior indivuals working on behalf of the non-profit or charitable organisation.


What you need to know about trustee indemnity insurance

Individuals that accept roles as trustees can be held personally liable while acting on behalf of your organisation. Trustee indemnity insurance offers a cost-effective mechanism to protect those individuals should an allegation occur. 

Below we provide an expert guide about trustee indemnity insurance allowing you to educated decisions when purchasing the cover. To talk with an insurance broker to discuss your needs call us on 0345 625 0711.


What is trustee indemnity insurance?

Trustee indemnity insurance (also known as trustee liability insurance) offers financial protection to individuals against civil, criminal and regulatory proceedings, which may arise while acting in their capacity on behalf of the organisation.

The insurance cover will pay legal costs incurred in defending allegations and damages arising from any judgment, award or settlement. It is a common insurance protection required for trustees to accept their positions on the board.

Trustee Indemnity insurance is the same as D&O insurance, however it is specially designed for third sector and charitable organisations. If you act as a trustee for a pension scheme, please visit pension trustee liability insurance.

 

What is trustee indemnity insurance?


    Why is trustee indemnity insurance important and what liabilities are you exposed to?

    Trustees and individuals acting on behalf of your organisation are exposed to numerous obligations and can become the target of legal proceedings during the course of managing a charitable organisation.

    Any trustee, officer or employee (including volunteer) performing duties on behalf of the organisation that fails to meet their legal obligations can be held personally liable for their actions and the actions of others.

    The law generally seeks to protect individuals where they have acted in good faith and complied with their duties. However, every organisation should consider trustee indemnity to offer a legal defence against allegations and protect their personal assets.


    What covers are available under a trustee indemnity insurance policy?

    Most insurers will offer trustee indemnity insurance cover on a package basis, allowing the selection of which covers are preferred ro meet the needs of the charity or organisation.

     

    Trustee indemnity insurance explained

    Trustees indemnity insurance provides individuals financial protection from civil litigation and regulatory investigations, while acting in their capacity on behalf of the organisation. The insurance will protect against legal costs in defending allegations and damages.

     

    Organisation or entity insurance explained

    Organisation insurance provides the organisation financial protection from civil litigation and regulatory investigations. (i.e breach of contract, copyright infringement and corporate manslaughter). Organisation insurance can only be offered when purchased with trustee indemnity insurance.

     

    Employment practices liability explained

    Employment practice liability insurance, also known as EPL Insurance, provides the organisation and their trustees, directors, officers, employees, protection from claims arising from a range of employment disputes (i.e. wrongful dismissal, harassment and discrimination).

     

    Crime or fidelity insurance explained

    Crime insurance provides the organisation financial protection for the theft of property, money or securities from employee dishonesty or fraud. The standard offering is typically limited to Employee Cover, however some insurers may provide additional cover.

     

    Professional indemnity insurance explained

    Professional indemnity insurance, otherwise known as PI Insurance, protects against negligent acts, errors or omissions resulting from civil litigation in the provision of advisory, counselling, consultation or other services.

     

    Additional covers available under the one policy can include: kidnap and ransom, cyber insurance and pension trustees liability insurance.

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    Trustee Liability Insurance FAQs


    How do insurers calculate our trustee insurance cost?

    The size of your organisation, measured by turnover, total assets and employee numbers will have a direct impact on how your trustee indemnity insurance premium is calculated. A key consideration for insurers is your financial stability and operational history. If you maintain a strong revenue and profitability with little debt, you are likely to obtain more favourable terms for your trustees.


    How much trustee indemnity insurance should we purchase?

    The limit of liability you purchase will depend on your perception of the exposure and how much you are prepared to spend to mitigate the risk. We recommend you consider more than one option to appreciate the cost to increase your limit. It is also worth considering that defence costs on average amount to 65% of the total cost of trustee claims.