Learn more about Trustee Indemnity Cover with Tennyson the charity insurance experts

Trustee Indemnity Insurance is specialised cover, which is applicable where trustees feel that they are at risk of being sued for losses incurred by the organisation they responsible for.

The Charity Commission advise that Trustees must be clear that their decision to purchase TII is based on a genuine need and that risks and potential liabilities have been identified that justify spending charity funds on this insurance cover.

Example

Trustees of a local cricket club commissioned a builder to build them a new pavilion. They did so confident that they would receive funds from a benefactor. In the event they never received the funds they needed and the club was unable to pay for the builders work. The builder sued the trustees of the club.

Who needs Trustee Indemnity Insurance?

This cover is not appropriate for employees, it is specifically for senior management, directors and trustees.

Even if you are a ‘Limited’ company you may still need TII cover because the limited guarantee element only applies if the loss incurred causes the organisation to go into administration.

What does it cover?

Trustee Indemnity Insurance has two key elements of cover:

• It protects Trustees and the senior management from personal liability arising from legal claims against them for losses they cause to their own organisation or a third party due to acts of maladministration
• It covers the organisation’s liabilities arising from legal claims against the organisation due to maladministration by an insured Trustee or member of senior management.

What does it not cover?

Bodily injury or property damage.  There is a common misconception that trustees need TII to protect them from being sued by a member of the public who may have been injured through contact with their organisation.  This should not normally be the case as Public Liability cover would provide protection in such an instance.

How much cover do I get?

Various limits of cover can be selected but should be in proportion to the maximum loss that an insured person could become liable for.

What might it cost?

You can buy Trustee Indemnity Insurance from as little as £100.

References

http://www.charity-commission.gov.uk/supportingcharities/ogs/g100c004.asp#_Toc159922985]