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Charity trustees
A Charity Commission statutory inquiry is a formal investigation of a charity under section 46 of the Charities Act 2011, opening up powers the Commission cannot otherwise use. For trustees, it raises an immediate insurance question: will your trustee indemnity or D&O policy pay for lawyers to respond, and what will it leave out?
Part of: Trustee indemnity insurance for UK charities
In short
The Charity Commission can open an inquiry under s.46 of the Charities Act 2011 and then direct people to give evidence (s.47), suspend trustees and freeze assets (s.76), remove trustees (s.79) and publish its findings (s.50). Inquiries are rare compared with ordinary regulatory concern cases. Trustee indemnity and D&O policies commonly include investigation costs cover, often sub-limited and triggered only by formal steps. Section 189 requires charity-funded policies to exclude criminal fines, regulatory penalties and some dishonesty-related liabilities. Trustee insurance is not compulsory; it is a power trustees may use if they decide it is in the charity’s best interests.
Last reviewed 12 October 2026 by the Apex professional indemnity team.
Section 46 of the Charities Act 2011 lets the Charity Commission open an inquiry into a single charity, a group of charities or a class of charities, either generally or for particular purposes. The Commission can run it itself or appoint someone to conduct it and report back. It cannot extend an inquiry to an exempt charity unless that charity’s principal regulator asks it to.
Several of the Commission’s strongest powers can only be used once an inquiry is open. Its guidance Statutory inquiries into charities (CC46) says the Commission will usually open one where there are indications of misconduct or mismanagement, a significant risk to charity property, beneficiaries or work, a need to gather evidence, or a need to protect public trust and confidence.
| Power | Where it sits | What it lets the Commission do |
|---|---|---|
| Open an inquiry | s.46 | Investigate a charity or class of charities, directly or through an appointed person |
| Obtain evidence | s.47 | Direct any person to give written accounts and answers, supply copies of documents and attend to give evidence, verified by statutory declaration or taken on oath |
| Temporary protection | s.76 | Suspend a trustee, officer, agent or employee; appoint extra trustees; freeze property; restrict transactions; appoint an interim manager |
| Removal and schemes | s.79 | Remove a trustee or officer who was responsible for misconduct or mismanagement, knew of it and did not take reasonable steps to oppose it, or contributed to it |
| Directions | s.84 | Order trustees, officers or employees to take specified action in the charity’s interests |
| Publication | s.50 | Publish the inquiry report or a statement of its results |
A suspension order under s.76 can last no more than 12 months. It can be extended, but the total period of suspension cannot exceed two years. The Commission covers England and Wales; CC46 notes that charities in Scotland and Northern Ireland fall under OSCR and the Charity Commission for Northern Ireland.
Most Commission involvement never becomes an inquiry. Its quarterly casework data separates regulatory concern cases, where it identifies and works to resolve problems in a charity, from statutory inquiries, which it describes as a legal power to formally investigate and to use protective powers.
The gap in scale is large. For April to June 2026 the Commission reported 1,552 regulatory concern cases opened against 5 statutory inquiries opened, with 171 inquiries ongoing at the end of the period.
Outside an inquiry the Commission can still issue an official warning under s.75A to a trustee or charity it considers has committed a breach of trust or duty or other misconduct or mismanagement, after giving notice and considering representations, and may publish it.
For insurance, the distinction matters: a wording that pays only for a “formal investigation” may not respond to an informal enquiry letter.
The Commission deals mainly with the trustees, because they are legally responsible for running the charity. CC46 sets out what usually follows once an inquiry opens.
CC46 stresses that opening an inquiry is not in itself a finding of wrongdoing, and that you may take your own legal advice at any stage. You can ask for a decision review within 3 months of being notified of a decision, and some decisions can be appealed to the First-tier Tribunal (Charity) within 42 days.
Often in part, subject to the policy terms. Trustee indemnity and charity D&O policies commonly include cover for legal costs of responding to a regulatory investigation, but it is usually narrower than the main limit and defined tightly.
| Exposure | How policies commonly respond | Where the gaps usually are |
|---|---|---|
| Lawyers to advise trustees and attend s.47 interviews | Investigation or inquiry costs section, usually with the insurer’s prior consent | Often a sub-limit; may start only on a formal notice, direction or written requirement to attend |
| Early enquiries before an inquiry opens | Some wordings cover pre-investigation or informal enquiries | Many do not, or cap them separately |
| Civil claim against trustees after the inquiry | Main liability cover for breach of trust or duty, plus defence costs | Prior-knowledge exclusions if concerns were known before the policy started |
| Criminal proceedings arising from the same facts | Defence costs may be advanced, subject to repayment terms | s.189(2)(b): no indemnity where finally convicted of an offence involving fraud, dishonesty or wilful or reckless misconduct |
| Fines and regulatory penalties | Not covered | s.189(2)(a) requires charity-funded policies to exclude criminal fines and regulatory penalties |
| Losses to the charity itself, such as misappropriated funds | Not a trustee indemnity matter | Usually needs crime or fidelity cover |
Check whether the policy pays for the charity as an entity as well as insured persons, and whether insured persons include employees and former trustees: under s.79(5), once the Commission has given notice that it intends to remove someone, it can make the order even if they have since left office. Cover is usually claims-made, so a concern raised before renewal may need notifying as a circumstance.
No general law requires a charity to buy trustee indemnity insurance. The Commission’s guidance Charities and insurance (CC49) names employers’ liability, for charities with staff, and motor insurance, for charities that own or operate vehicles, as the covers required by law. Trustee insurance is a decision for the board.
Section 189 gives trustees a statutory power to buy it out of charity funds. The conditions are:
CC49 adds that the only time a charity needs the Commission’s authority is where its governing document explicitly forbids buying it, which the Commission describes as extremely rare. Trustees may also buy cover personally without any legal authority. CC49 dates from 2012, so read it alongside the current Act.
If this affects your business, these are the points a broker will ask about:
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Often in part. Many trustee indemnity and charity D&O policies include investigation costs cover for legal fees when a regulator such as the Charity Commission formally investigates. It is commonly sub-limited, may start only with a formal notice or direction, and will not pay criminal fines or regulatory penalties, which s.189 of the Charities Act 2011 requires charity-funded policies to exclude.
It is not generally mandatory. The Commission’s CC49 guidance identifies employers’ liability and motor insurance as the covers charities must have by law where they apply. Trustee indemnity insurance is optional: s.189 lets trustees buy it from charity funds if they decide it is in the charity’s best interests, unless the governing document expressly forbids it.
It can suspend a trustee under s.76 once an inquiry is open, for up to 12 months per order and no more than two years in total. Under s.79 it can remove a trustee who was responsible for misconduct or mismanagement, knew of it and failed to oppose it, or contributed to it. Once it has given notice of its intention to remove someone, it can make the order even if they have since left office.
It may, if the definition of insured person includes former trustees and the policy in force when the matter is notified responds. Because cover is usually claims-made, retired trustees depend on the charity keeping the policy going or arranging run-off. Check the wording rather than assuming they are protected.
Usually yes. Section 189(6) of the Charities Act 2011 says the statutory power applies despite a general prohibition on trustees receiving personal benefit. It does not apply where the trusts expressly prohibit buying trustee insurance, which CC49 describes as extremely rare. Trustees must still decide the purchase is in the charity’s best interests.
Fill in the online D&O proposal and a named Apex broker will read it, ask about anything the investigation cover needs to reflect and approach suitable markets for you. Or call 0117 325 0027.
Start your D&O proposal Call 0117 325 0027Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances. Cover is always subject to the insurer’s acceptance and the policy terms, and this page does not guarantee that cover will be available or on what terms.
