Charity trustees are often giving up their time and skills for a cause they feel passionate about. Trustees Indemnity cover can help protect them from the potential personal financial exposure that their responsibilities hold.
Tim Larden, Managing Director
Protect your management and trustees from the cost of being sued.
A sample of potential claims to be made against a Trustees Indemnity Insurance policy.
Claim For Alleged Trespass
The neighbouring landowner to the trust claims that recent constructions carried out by the trust infringed on their property. The trust claims that documents from the 18th century show that the previous owner passed the land over to them, whereas the claimant declares that the land never legally belonged to the previous owner. It appears that the claim will be upheld and that the claimant is indeed the legal owner of the disputed property. The trustees will be responsible for damages and for restoring the land to its former condition.
Claim For Alleged Defamation
Following publication of an article, the charity trustees were sued for defamation by another charity with similar objectives. The claimant stated that certain statements made in the article were untrue and gave a false representation of the charity. The matter was eventually settled out of court with considerable fees being paid.
Claim For Alleged Breach of Authority
A claim was made against a trustee by one of the charity’s employees. Before the charity ceased operating the trustee had indicated that employees would receive an enhanced redundancy payment, which was in breach of his authority. As a result, several employees had made financial decisions based on that statement, and hence ran up costs to cancel these arrangements.
Claim For Alleged Denial Of Access
A claim was made against the trustees as they had sub-let a section of their premises to another organisation. This had been done without consultation to the landlord and broke the conditions of the charity’s lease on the property, and subsequently he ordered the eviction of the sub-tenants. The evictees brought a successful claim against the trustees for denial of access.
Claim For Dishonesty Of A Trustee
A claim was made by a charity, which had suffered a loss in excess of £12,000. Due to poor internal controls, one of its trustees managed fraudulently withdraw substantial funds. Although it is an unpalatable risk to consider, unfortunately, trustee fraud is a rare but potentially very damaging risk to a charity.
Claim For Libellous Action
A claim was made against the trustees for alleged slander. After initial discussions the allegation was retracted and an apology offered. The solicitor’s fees, which had been incurred were settled for over £1,500.00.