D&O and Trustee Cover for Academy Trusts and Schools

Trustees and governors govern public money and serious decisions. Here is how their personal protection works — and where commercial cover fits alongside scheme arrangements.

Why school governance carries personal exposure

The people who govern schools — academy trustees, members of a multi-academy trust (MAT) board, local governors and senior officers such as the chief executive and chief financial officer of a trust — are not passive figureheads. They carry formal duties: stewardship of public funds, oversight of educational standards, responsibility for the employment of staff, and accountability for how safeguarding is governed at policy level. Academy trusts are charitable companies, so their trustees are simultaneously company directors and charity trustees, owing duties in both capacities.

Where things go wrong — a financial control failure, an allegation of wrongful dismissal, a challenge to how a serious decision was reached, a regulatory investigation into the trust’s governance — questions can be directed at the individuals as well as the institution. Defending against such questions costs money and time even when the individual has acted entirely properly, and that is the exposure this class of insurance exists to manage.

To be clear about scope: nothing here describes any particular school, trust or incident. The duties described are the generic governance responsibilities that come with these roles.

The RPA: the government alternative for academies

Academy trusts in England have access to the risk protection arrangement (RPA), a government scheme that exists as an alternative to buying commercial insurance for many of a trust’s risks. Many trusts are members of it, and for those trusts it forms the backbone of their risk protection.

We deliberately will not assert here what the RPA does or does not cover, because scheme documents are updated over time and the detail matters. The practical advice is simpler and more durable: whoever governs your trust should check what the arrangement actually provides against what your trustees and officers actually need. Points worth examining with the current scheme documentation in hand include how protection for individual trustees and officers works, how legal defence costs are handled, whether there are categories of governance risk that sit outside the arrangement, and what happens for activities or entities connected to the trust that the arrangement may not embrace.

Where a trust identifies gaps between what the arrangement provides and what its board wants, commercial cover can sit alongside scheme membership. That is a wording and structuring exercise — exactly the kind of work a broker does.

Independent schools: a straightforward commercial purchase

Independent schools sit outside the academy framework, so the question for their governing bodies is the conventional one: what commercial D&O or trustee liability cover should the school buy? Most independent schools are charities, often structured as charitable companies, so governors are typically charity trustees and frequently company directors too. Trustee indemnity or management liability cover for the governing body is a normal part of a well-run school’s insurance programme, alongside the school’s property, liability and other covers.

The considerations mirror those for any charity board: an adequate limit for the size and complexity of the school, cover for regulatory investigations and inquiries, protection that follows former governors after they step down, and clarity about how the policy interacts with any indemnity the school itself gives its governors.

Where commercial cover fits for academy trustees

For academy trusts, commercial D&O or trustee liability cover tends to enter the conversation in a few situations:

• Trusts that have chosen commercial insurance over the scheme. Some trusts insure commercially across the board, in which case trustee and officer protection is simply one of the policies to be placed properly.
• Boards that want certainty beyond scheme arrangements. Some boards, having reviewed what their scheme membership provides, decide they want a dedicated, contractual insurance policy protecting the individuals — with a defined limit, defined triggers and a claims service — either instead of or in addition to what the arrangement offers.
• Connected entities and activities. Trading subsidiaries, lettings operations and other connected ventures can carry governance exposures of their own, and those entities’ directors may need cover arranged separately.
• Officers with wider roles. Senior officers who also hold external directorships or trusteeships have exposures that no school-focused arrangement is designed to address.

As an illustrative scenario only: a MAT board reviewing its protection might conclude that it is content with its scheme membership for most risks, but still choose to buy a modest commercial trustee liability policy so that its volunteer trustees have an insurance contract of their own standing behind them. That is a choice some boards make and others do not — the point is that it should be a considered choice, not a default.

How Apex helps schools and trusts

Apex is an independent Bristol-based broker, authorised and regulated by the Financial Conduct Authority (FRN 724952). We can review what your current arrangements provide for the individuals on your board, identify where a commercial policy would add something real rather than duplicate what you already have, and place trustee liability or D&O cover with insurers who understand the education sector. We are equally comfortable telling a board that its existing arrangements look adequate — independence means the advice is not tied to a sale.

Frequently asked questions

Are academy trustees personally liable if something goes wrong at the trust?

Trustees of an academy trust benefit from the limited liability of the corporate structure for most ordinary purposes, but the roles still carry personal duties, and individuals can face regulatory scrutiny, disqualification proceedings or claims alleging breach of duty. Even unfounded allegations must be answered, which is why defence-cost protection is the heart of this class of cover. Take advice on your own structure and circumstances.

Do school governors on local governing bodies need cover, or only the trust board?

In a MAT, formal trusteeship sits with the trust board, but local governors exercise delegated functions and can still find themselves drawn into disputes or investigations. When reviewing protection, it is sensible to check that whatever arrangement or policy the trust relies on extends to local governing body members, not just the trustees themselves.

Can a trust hold RPA membership and commercial trustee cover at the same time?

Membership of a scheme and ownership of a commercial policy are not mutually exclusive in principle, but overlap, interaction and any conditions attached to each need to be checked carefully against the current documents. This is a structuring question to resolve with your broker and, where appropriate, the scheme administrators before buying.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on your specific circumstances.