Many of the organisations that own or run museums, theatres, and heritage buildings are not for profit organisations. The trustees of such organisations can protect themselves and their assets through carefully assessing risks and potential solutions. Whilst Public and Products Liability insurance, and Employers’ Liability insurance are reasonably well known, there is still much confusion around other insurances that help protect the trustees. Here we uncover just a few other options that are available.
The Trustees are the ultimate body of people that carry the responsibilities of the charity and its activities. When accidental errors are made by them, or those they delegate to, they can become personally liable for those mistakes. Anything that has caused harm, distress, or financial damage to a 3rd party could lead to a claim being brought against an individual trustee.
If a claim was made against a trustee, they might face legal costs plus the cost of potential damages awarded. Trustee Indemnity insurance will help protect a trustee in many of these situations, bringing a greater degree of peace of mind for those serving as trustees. Sometimes you will hear this type of insurance called Trustee Liability Insurance, or Management Liability.
Entity defence insurance specifically covers the charity as a whole and is normally purchased when buying Trustee Indemnity insurance. It comes into play with an action brought against the charity as a whole, not an individual.
An example of the benefit of such insurance might be if someone died due to a workplace accident, and the Crown Prosecution Service might then charge the charity with corporate manslaughter. The insurance would kick in to help defend the charity in court. Other examples include breach of contract investigation, where a trustee is alleged to have breached a contract for goods or services offered.
Employment Practises Liability insurance helps deal with potential “wrongful employment practices” and claims that arise. Organisations purchase such cover to defend actions brought by employees, ex-employees, office holders and regulatory bodies who claim that there has been a breach of employment law, with subsequent loss of earnings and distress.
Pensions Trustee Liability Insurance
Although often unpaid, trustees are expected to understand and keep up to date with the laws and investment principles of their pension schemes. Failure can result in fines or other penalties against them and the charity. Pension Trustee Liability covers defence costs, awards and damages, and therefore protection of trustees and individuals that administer a pension scheme or any employee benefit or welfare plan.
Fidelity Guarantee insurance helps to protect the charity against its own key officers stealing money by dishonesty or fraud. It is often a difficult insurance to sell, as few clients think this problem could ever affect them. The reality is sadly otherwise.
Hayes Parsons Insurance Brokers
Hayes Parsons has been working with museums, theatres and heritage organisation since 1964 and has the experience and knowledge to advise on your insurance arrangements as well as offer risk management advice. If you have any queries about how to protect trustees and directors then get in touch with our expert, Martin Howard, who is available to answer any questions you may have.