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What is Trustee Indemnity Insurance?

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Trustee insurance offers financial protection to individual board members in the event that they are sued due to mismanagement in their role as a director or trustee which is detrimental to the organisation they serve or parties having an interest in it.

Why do you need trustee indemnity insurance?

The best form of trustee insurance is one which is tailored to an individual’s specific capacity as a trustee and has been designed for them to protect themselves from liabilities.

Trustees having their own insurance means that their respective organisation will not need to cover the cost of any claim relating to an issue arising in their proceedings, and can limit the risk of any hit on the charity or trust’s ability to pursue the work it has set out to achieve.

It is also useful for trustees to have trustee indemnity insurance if they become the subject of a claim from a third party, meaning they can defend themselves against the claim even if they are held personally liable.

Therefore, effective trustee indemnity insurance can provide financial protection for all liability that a trustee personally faces.

What kind of things should your trustee indemnity insurance do for you?

Your trustee insurance should be customisable, so you can ensure that it covers any exposures you face and provides protection from liabilities that may arise.

There are two main types of trustee indemnity insurance that can be purchased:

  • Directors & Officers coverage: this is designed to protect a trustee for some specific liabilities relating to a breach of their duties as trustee, or if they have acted irresponsibly in relation to the organisation they have been appointed to.
  • Recovering costs of a claim: this type of insurance can protect a trustee in the event of a claim being raised against them, even if they are held personally liable for the claim, and can help pay any legal fees they are expected to meet on the claimant’s behalf.

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