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Are Your Trustees Really Protected?
Why Northern Ireland charities should review Trustee Indemnity, Trustees’ & Management Liability, and Directors & Officers cover.
Running a charity is about service, stewardship and public trust.
But trustees, directors and senior leaders can still face personal allegations, regulatory scrutiny, governance disputes and employmentrelated claims.
Incorporation can help protect trustees from personal liability, but it does not remove the need for strong governance or suitable insurance.
The Charity Commission for Northern Ireland notes that incorporation can help protect trustees from personal liability, while trustees must still act in the charity’s best interests and follow charity law and the governing document. *
* www.charitycommissionni.org.uk/running-a-charity/charity-incorporation
Common exposure areas charities often underestimate
1. Trustee and board decisions
Claims or allegations may arise from:
CCNI states that trustees are ultimately responsible for the governance of the charity, for overall direction and supervision, and are accountable for the charity’s assets.**
**www.charitycommissionni.org.uk/guidance-a-to-z/internal-conflicts
2. Regulatory reporting failures
Northern Ireland charities have ongoing reporting duties.
Each year after registration, charities must submit an Annual Monitoring Return, and this must be filed within ten months of the financial year end, together with the required accounts and reports.
Trustees are also expected to keep the charity’s entry on the register up to date, including trustee details.
For many organisations, that creates a real management liability exposure if deadlines are missed, disclosures are incomplete, or oversight is weak.
3. Serious incident exposure
If a serious incident occurs, trustees must deal with it and report it to the proper authorities, including the Commission. CCNI says trustees should report serious incidents, whether confirmed or alleged, and should do so as soon as reasonably possible ***
This can include issues such as:
4. Employment practice and management claims
Charities with employees, sessional workers or volunteers can face allegations involving:
These are often not picked up properly under basic charity or package policies.
5. Reputational and donor confidence risk
Annual returns, accounts and trustees’ reports are published on the public register, which means
governance failings can quickly become visible to funders, members, supporters and the public.
CCNI also notes that filing on time helps keep a charity’s status “green” on the register. ****
****www.charitycommissionni.org.uk/news/blog-is-your-annual-return-uk-gdpr-compliant
Where gaps often appear in cover
Many charities assume they are protected because they have a combined or charity package policy.
Often, the real gaps are in areas such as:
Why this matters for Northern Ireland charities
CCNI expectations are real
Northern Ireland charities are expected to:
A failure in governance can become both a regulatory issue and an insurance issue.
Charitable companies carry dual obligations
A charitable company limited by guarantee will usually have both charity governance responsibilities and company law responsibilities, making it even more important that the policy properly addresses trustees, directors and the organisation itself.
Company law also requires all companies, including charitable companies, to prepare accounts; in Northern Ireland charities with gross income
Questions every charity should ask now
And just as importantly:
A simple message for trustees:
“ Property and liability insurance protect assets.
Trustee and management liability insurance helps protect decision-makers.
Both matter. “
Review your wording before a problem arises
A proper review should consider:
This article is for general information only and does not constitute legal or regulatory advice.
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