The “Why, What and How” of Trustee Indemnity Insurance

The “Why, What and How” of Trustee Indemnity Insurance

In this article written specially for revival.fm by Maurice Logie (pictured left), director, Moreland Insurance Brokers of Hamilton, Lanarkshire, answers three fundamental questions about a matter that affects all church leaders.

Why does my church need it?

The senior officers and trustees of a church have individual, personal duties and responsibilities for the management and administration of that church and/or associated groups – this brings with it the potential of many liabilities.

The fact that many people may be volunteers and give their time ‘free’ acting in either a management capacity or as a trustee, does not absolve them from these very real liabilities. There are several publications explaining the duties and responsibilities of a trustee, which the Charity Commission has produced, giving out details on such things as protection and investment of assets (e.g. property), the requirement of financial information to be prepared and available i.e. the church’s accounts, together with guidelines in respect to employees and agents of the church, as to how they are monitored.

Even in cases where a CIO (Charitable Incorporated Organization) SCIO in Scotland is established Trustees still have management responsibility and are liable for breaches of trust and for fraudulent / wrongful trading or other similar acts or omissions.

The important issue for charities or churches to consider is the potential liability and exposure they open their trustees, directors and offices to and itself becomes a ‘duty of care’ particularly to employees of that church, charity or association.

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What does it cover?

Trustee Indemnity (TI) insurance is a personal insurance that protects trustees against the risks arising from a ‘wrongful act’ like breach of duty or breach of trust. What distinguishes TI from other types of liability insurance is that it covers liabilities which are those of the Trustees, rather than those of the church or charity itself.

This personal liability arises when a trustee has to pay to:

Make good a financial loss suffered by the charity, or

Compensate a third party who has suffered a financial loss as a result of their dealings with the charity.

Where appropriate the TI insurance benefit removes the trustee obligation to meet a liability out of his or her own pocket.

How do you get insured?

Charities have an express right to purchase Trustee Indemnity Insurance and the right to pay the premiums out of the charities funds. This exists under the auspices of OSCR the Scottish Charities Regulator.

At Moreland Insurance we include at least £100,000 of Trustee Indemnity Insurance cover In all our Church Insurance quotes . As specialist church insurance providers we can check your cover for all aspects of risk at no cost or obligation.

Revival FM newTo help support Revival Radio any church that arranges their insurance via Moreland’s will be helping to support their work. We will give a 5% donation of the premium to them thus helping them to continue broadcasting across the Central Belt of Scotland.

Maurice Logie (pictured above) is a Director of Moreland Insurance Brokers based in Hamilton and also an Elder and Trustee of Harvest Christian Fellowship, Hamilton, Lanarkshire and a Trustee of Easterhouse Community Church, Glasgow.

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