While it may appear that working for a charitable cause poses no threat to an individual or their personal wealth, charity trustees do in fact put their own financial security on the line when taking on such positions.

Trustees of charities often have as much legal responsibility as company board directors and can be liable for financial losses incurred by customers, suppliers, employees or other stakeholders of the charity as a result of their management decisions. Insurer RSA is encouraging anyone in a senior position within a charitable organisation to seek appropriate cover.

Charity Trustee Assurance cover, available from RSA, is similar to Directors’ and Officers’ (D&O) insurance and seeks to protect trustees from legal actions made against them while working on behalf of the charity. It can also be extended to cover a range of actions brought directly against the charity providing a convenient package to address the financial risks faced by charities and their trustees.

Nick Allen, Financial Risks Manager at RSA, said, "Working for a charity is an admirable thing to do but unfortunately, as with being a company director, it does involve risks".

“In the litigious society we live in, it is no longer unheard of for people to sue charities and so it is vital the organisations and the trustees concerned have appropriate protection in place. Too often, charities may be offered cover under a standard D&O policy which is not specifically designed for their needs”.

Charity Trustee Assurance cover is one of a number of new products from RSA to address the needs of Charities. Optional extensions to the package include protection against professional negligence, employee fraud, event cancellation and employment disputes.

Article courtesy of RSA. Published 09-06-10

Please contact Carl Balshaw - Director at our Euxton Office on 0845 88 22 800 for further information or advice if you are involved in this sector of business. We can offer a no obligation review for all types of charitable organisations.