Reviewed by Matthew Bartlett, Director · Last reviewed 9 July 2026
Charity trustees carry personal liability for the way a charity is run, and the trustee body has legal duties that sit alongside the Companies Act duties for charitable companies. This entry sets out where D&O (often placed in the charity sector as ‘trustee indemnity insurance’) responds to trustee-level exposure, the specific Charity Commission investigation triggers, the statutory framework in the Charities Act 2011, and the wording features that matter for unincorporated charities, charitable companies, CIOs, and community interest companies.
Under the Charities Act 2011 trustees owe the charity a fiduciary duty and a duty of care, and can be pursued personally for breach. Section 46 of the Act gives the Charity Commission the power to open a statutory inquiry, and sections 76 to 79 give the Commission powers to make orders that directly affect trustee positions, including suspension and removal. Charitable companies also owe the section 171-177 Companies Act 2006 duties, and CIOs owe equivalents under the Charities Act 2011 and the Charitable Incorporated Organisations (General) Regulations 2012.
Trustee-level claims can come from the charity itself (through the trustee body or an independent examiner), from the Charity Commission by inquiry or by referral to the Attorney General, from HMRC where charity tax reliefs are challenged, and from employment tribunals where an executive trustee is named alongside the charity in a claim by an employee or volunteer.
Side A protects the individual trustee where the charity cannot or will not indemnify. Trustees of unincorporated charities have limited access to charity funds for indemnity, so Side A is doing heavier lifting than in a company context. Side B reimburses the charity for costs of indemnifying its trustees where the constitution allows. Side C in a charity context is normally not present or is limited to specific defined events. Extensions worth attention include pre-claim investigation costs (Charity Commission inquiries), employment practices liability, and cover for outside directorship of trading subsidiaries.
Deliberate dishonesty, fraud and improper personal benefit are excluded once established by final adjudication. Prior known circumstances are excluded. Bodily injury and property damage sit on public liability and employers’ liability. Fines and penalties that are not insurable as a matter of English public policy fall outside cover. Claims by one insured against another are excluded save for standard carve-outs for shareholder and employment claims (and equivalents in the charity context).
Charities Act 2011 — section 46 (statutory inquiries), sections 76-79 (Commission powers pending or following inquiry), section 178 (powers to permit trustee remuneration), sections 189-191 (relief from liability). Companies Act 2006 sections 171-177 for charitable companies. Charitable Incorporated Organisations (General) Regulations 2012 for CIOs. Trustee Act 2000 for the statutory duty of care on investment, delegation and reviewing agents. Insolvency Act 1986 sections 213-214 for charitable companies where the charity fails. Public Interest Disclosure Act 1996 provisions of the Employment Rights Act 1996 for whistleblowing claims. Insurance Act 2015 sections 3, 7 and 8 for the fair-presentation duty.
D&O covers the trustee’s decisions in running the charity — investment policy, safeguarding governance, reserves policy, decisions to enter or exit a service contract. Professional indemnity covers the charity’s delivery of professional services to its beneficiaries or funders — advice given by a counselling charity, an assessment by a housing charity. Where the two overlap, the wording of each policy matters: a specialist broker aligns the definitions and notification triggers so that a real event finds a real home.
A national charity is the subject of a serious incident report to the Charity Commission concerning historical safeguarding failings at one of its regional services. The Commission opens a section 46 statutory inquiry. Two former trustees and the current chair are named in the inquiry papers. Legal defence of the individual position through the inquiry process, subsequent Commission orders under sections 76-79, and any related civil litigation from beneficiaries falls on the trustee body. Side A of the trustee indemnity policy responds to the individual defence costs where the charity’s constitution does not extend to the specific loss, and Side B reimburses the charity where it can lawfully indemnify. Pre-claim investigation costs pick up counsel’s early advice on the Commission’s process and on the safeguarding-related civil claims that follow.
Many charities operate trading subsidiaries to protect the charity from commercial risk. Trustees who also sit on the trading subsidiary board wear two hats, and D&O policies need to reflect that. Outside-directorship extensions on the parent charity’s policy usually respond to the trustee’s role in the subsidiary, but the wording needs to say so explicitly. Where the subsidiary carries its own D&O the two policies s