Charity trustee liability insurance (UK, 2026)

Category: Charity insurance · Reviewed by the Apex broking team · Last reviewed 2026-08-22 · ~3 min read

What the cover is for

Charity trustees are personally liable. Unlike shareholders in a company, a trustee who acts in breach of trust or duty can be required to make good the loss out of their own pocket, and in an unincorporated charity that liability is not limited by any corporate veil. Trustee indemnity insurance responds to that personal exposure — defence costs, and damages or compensation where the trustee is found liable — and normally also covers the charity where it has properly indemnified the trustee.

In a charitable company or a CIO, the cover overlaps heavily with conventional directors and officers insurance, and is often written on a D&O form adapted for the charity sector. The practical scope is similar: wrongful acts in the management of the organisation, regulatory investigations, employment practice allegations, and health and safety or corporate manslaughter defence costs where the wording extends to them.

The statutory power: Charities Act 2011, section 189

Trustees may not spend charity money on their own protection unless they have authority to do so. Section 189 of the Charities Act 2011 supplies that authority. It permits trustees to arrange, out of charity funds, insurance against personal liability for any breach of trust or breach of duty, and for negligence, default, breach of duty or breach of trust in their capacity as trustee or as a director or officer of the charity — provided the trustees are satisfied that buying it is in the best interests of the charity.

The power is subject to anything in the charity’s governing document that expressly prohibits it, and the decision to buy is itself a trustee decision governed by the ordinary duty of care, so it should be minuted with the reasoning recorded. Where a governing document contains an express prohibition, Charity Commission authority is needed to override it.

What the policy must exclude

Section 189 permits the insurance only if the policy terms exclude cover for certain things. The excluded categories are: fines imposed in criminal proceedings and sums payable to a regulatory authority by way of a penalty; the costs of defending criminal proceedings where the trustee is convicted of an offence involving fraud, dishonesty or wilful or reckless misconduct; and liability arising from conduct the trustee knew, or must reasonably be assumed to have known, was not in the interests of the charity, or where the trustee did not care whether it was in the charity’s interests or not.

These are not optional drafting preferences; they are statutory conditions of the power to buy the insurance from charity funds. A policy that purports to cover them does not comply, and a trustee body relying on such a policy has not validly exercised the section 189 power.

What it does not do

Trustee indemnity insurance does not protect the charity against claims made against the charity itself — that is what public liability, employers’ liability, professional indemnity and, where relevant, abuse or safeguarding cover are for. It does not cover the trustee’s liability for a deliberate wrong. It does not remove the trustee’s duty to act properly, and it is not a substitute for a functioning governance framework, conflicts register and decision-making record.

It also does not, on its own, answer the question of whether trustees of an unincorporated charity should incorporate. Where a charity holds property, employs staff or enters significant contracts, the structural answer — a CIO or charitable company — usually does more for trustee protection than any policy.

Buying it in 2026: what actually drives the placement

There is no standard price, because trustee liability cover is rated on the charity rather than on the product: income and asset base, the activities carried on, the sectors served, safeguarding exposure, employment profile, claims and complaints history, governance quality, and the limit of indemnity chosen. Charities working with children or vulnerable adults, delivering regulated services, or running significant trading subsidiaries are underwritten differently from a small grant-making trust.

Wording points that repay attention: whether cover extends to former and future trustees and to committee members and volunteers acting in a governance role; whether it responds to Charity Commission inquiries and statutory investigations; whether the limit is shared with any entity cover; and how the policy handles the run-off position for a trustee who resigns, or for the charity itself on a merger or wind-up. See what drives the premium for the rating factors in detail.

Why it matters

Trusteeship is unpaid and the liability is personal. Charities that cannot show a trustee that their exposure has been thought about find it harder to recruit and keep good boards. The insurance is one part of that answer; the minuted decision to buy it, the check that the governing document permits it, and the confirmation that the wording carries the section 189 exclusions are the other parts — and they are the parts most often missed.

Frequently asked questions

Can trustees pay for this insurance out of charity funds?

Yes. Section 189 of the Charities Act 2011 gives trustees an express power to buy trustee indemnity insurance from charity funds where they are satisfied it is in the charity's best interests, unless the governing document expressly prohibits it. The decision should be minuted.

What must the policy exclude to comply with section 189?

Criminal fines and regulatory penalties; the costs of defending criminal proceedings where the trustee is convicted of an offence involving fraud, dishonesty or wilful or reckless misconduct; and liability for conduct the trustee knew was not in the charity's interests, or did not care whether it was.

Is trustee indemnity insurance the same as charity D&O?

In a charitable company or CIO the two are usually the same product under different names, written on a directors and officers form adapted for charities. In an unincorporated charity the exposure is wider because there is no corporate veil, and the wording needs to reflect trust law liability, not just company law.

Does it cover claims against the charity itself?

No. It covers trustees personally, and the charity where it has properly indemnified them. Claims against the charity are covered by its own liability programme — public and employers' liability, professional indemnity, and abuse or safeguarding cover where relevant.

References

• Charities Act 2011, section 189 (trustee indemnity insurance), legislation.gov.uk
• Trustee Act 2000, section 1 (duty of care), legislation.gov.uk

Related entries

• Trustee indemnity insurance cost uk
• Charity trustee indemnity insurance uk
• Charity trustee liability indemnity insurance uk
• Charity trustee pi vs trustee indemnity uk
• Directors and officers insurance for charities uk
• Trustee act 2000

This entry is part of the Apex Insurance Wiki. It is general insurance information, not legal advice, and states the position as at August 2026. Last reviewed 2026-08-22. Next review: 2027-02-22. Always read the policy wording and take advice on your own facts.

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