What is Trustees Liability Insurance and why do I need it?
Trustee Liability Insurance is predominantly for individuals working within the charity and voluntary sectors, but it also applies to those working within a church. Those that can benefit from Trustee Liability Insurance, as the name suggests, are the trustees of organisations. However, when it comes to your church, it can also be of benefit to anyone who manages the church’s administration.
Who can benefit?
In your organisation, who is responsible for making decisions? The names for these persons vary but include governors, board members, directors or members of the management committee. So now we know who it is for, lets now explore why it is important.
Understanding the risks
Trustees and responsible board members are essential to the smooth running of any church. But being a trustee doesn’t come without risk. This is because as well as carrying a large amount of responsibility, the position also means that you could unintentionally find yourself embroiled in a legal dispute.
This is because as a trustee of the church, if something goes wrong then a claim could potentially be made against you – and you could be held responsible. When this happens, the repercussions are great and can lead to personal loss, as well as prosecutions and in the most severe of cases even imprisonment.
This can occur within even the smallest of church organisations, and so responsible individuals of any church must be fully aware of the responsibility the role carries.
At the end of the day, we are all human and even the most experienced of trustees can make mistakes. However, these errors of judgement in some cases can lead to legal proceedings. These proceedings can be extremely expensive and if the actions of the trustee are deemed to be to blame, then the significant costs would be expected to be paid by the trustee themselves, and not by the charity or organisation.
Whilst the law seeks to protect individual trustees from personal loss if they have genuinely acted in good faith, they are by no means immune. Even when a trustee has acted in accordance with the terms of the trust, they could still be at fault and a claim could still be made against them. If a decision made has a negative impact on either the organisation or another individual, then the trustee could be liable.
Even a trustee with decades of experience and no history of incidents can find themselves unstuck. So what can be done to protect yourself from this happening?
To safeguard against such an incident occurring, churches can apply for Trustees Liability Insurance. This will provide trustees with an armour of protection should a claim be made against them. Once covered, they will be able to recoup financial losses will have support when it comes to investigating, defending and compensating a claim. Church package policies do often include this cover as standard so check your policy carefully. It’s also important that you give consideration to the limit of indemnity and whether this is sufficient.
Trustees of all churches and charities– no matter how big or small – are encouraged to take out Trustee Liability Insurance.
If you want to talk to one of our experienced account handlers today to discuss this further, please call us on 01564 730 900.