Trustee indemnity · Decision aid

Do I really need trustee indemnity insurance?

The most asked question in this corner of UK charity insurance. The honest answer depends on four things — and for some small groups it’s genuinely no.

Last updated 16 May 2026·8 min read

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The decision matrix

Your situation	Default liability without TII	TII recommendation
Unincorporated group< £5k income, no employees, no premises	Joint and several personal liability — but claim frequency very low	Often disproportionate. Public liability first; consider incorporation
Unincorporated village hall, < £250k income	Personal liability for lease, employee claims; mitigated if a council holds the title	Useful. Often bundled with the hall’s package policy at modest extra cost
Small CIO, any size	Limited liability — trustees exposed only for breach of duty / wrongful trading	Useful for defence costs; not essential for asset protection
Charitable company, any size	Limited liability + Companies Act director duties	Strongly recommended. Bundled into nearly all charity package policies
CIC, any size	CIC director duties under Companies Act + CIC Regulator	Recommended. Sold as “trustees’ liability” / D&O by Markel, Zurich and others
Any charity working with children or vulnerable adults	Heightened regulatory exposure (DBS, safeguarding)	Essential. Plus safeguarding-aware PI
Any charity providing advice or services	Negligent-advice exposure	Essential. Plus professional indemnity

The honest case for skipping it

For a sub-£5,000 unincorporated community group with no employees, no premises and no contracts, the claim frequency is genuinely low. The Charity Finance Group's then-treasurer Caera Membrey, interviewed in Third Sector, observed that “there haven't been very many cases where trustee indemnity insurance has actually paid out.”

The catastrophic cases of the past decade — Kids Company, Captain Tom Foundation — were both substantial charities, not £3,000-a-year residents' groups. The dominant real-world risks for a tiny group are someone tripping over at the coffee morning (public liability) and the paid caretaker being hurt (employers' liability), both of which are different policies.

If your charity is at this end of the spectrum, the order of priorities is:

Public liability insurance — usually under £100 a year for a small community group
Employers' liability — legally required if you have paid workers, statutory minimum £5m
Incorporation as a CIO — solves the personal-liability problem more cleanly than insurance ever will (see CIO explained)
Then consider TII as a top-up

None of the major sector lawyers (Russell-Cooke, Bates Wells, Stone King, Browne Jacobson, Wrigleys, Farrer & Co) advise buying TII as a substitute for incorporation. Incorporation reduces liability; insurance merely funds the defence.

The honest case for buying it

TII earns its premium in three situations:

1. You face a regulator. A Charity Commission statutory inquiry, an ICO investigation after a data breach, an HSE prosecution, a Companies House enforcement action — these generate substantial defence costs even when the trustees are ultimately cleared. TII covers those costs.

2. You face disqualification proceedings. A director-disqualification application by the Insolvency Service, or a Charity Commission disqualification order, can run for months and cost six figures. TII funds the defence.

3. You face a civil claim from a third party. A donor alleging mismanagement of restricted funds, a beneficiary alleging negligence in service delivery, an ex-employee with a constructive-dismissal claim that names trustees personally — all defendable under standard TII wording.

For an incorporated charity with employees, contracts and a real-world activity profile, TII is a cheap insurance product (often £200–£600 a year, sometimes less when bundled) against disproportionate defence costs.

What TII does NOT do — the Captain Tom lesson

The Captain Tom Foundation Charity Commission statutory inquiry (report published 21 November 2024) ended with Hannah Ingram-Moore disqualified as a trustee for 10 years and Colin Ingram-Moore for 8 years. The conduct findings included an unauthorised trustee benefit of £18,000, conflicts of interest and blurred boundaries with family businesses.

None of that conduct would be covered by TII. Section 189 of the Charities Act 2011 prohibits TII from covering conduct the trustee knew was not in the interests of the charity, dishonest acts, deliberate misconduct, or unauthorised trustee benefit. Buying TII does not protect trustees who self-deal.

By contrast, the Kids Company trustees (cleared of disqualification by Mrs Justice Falk in 2021) used TII to fund a multi-year defence reportedly costing around £10m. TII paid because the trustees had acted honestly and the claim against them ultimately failed.

Three things to do before buying TII

If you are convinced TII is right for you, three checks before you click buy:

Confirm your governing document permits it. Charity Commission guidance CC49 requires that the governing document does not explicitly forbid TII purchase. The vast majority of modern constitutions are silent (which means permitted under the statutory s.189 power). A handful of older trust deeds expressly prohibit it.
Confirm the premium is reasonable. Trustees must consider proportionality to charity resources. A £400 premium on a £25,000-income charity is generally reasonable; the same premium on a £3,000-income charity may not be.
Confirm the wording excludes the statutory prohibitions.All mainstream UK charity TII policies do (Markel, PolicyBee, Zurich, Ecclesiastical, Ansvar). If a broker offers a generic commercial D&O policy without charity-specific wording, reject it — it will exclude the charity-law breaches that are the main thing you actually need cover for.

Where to look if you decide to buy

See best trustee indemnity insurance providers for the six main UK options compared, and how much trustee indemnity insurance costs for specimen pricing by charity income band.

Frequently asked

Is TII a legal requirement?

No. Public liability insurance is a practical requirement for any charity with members of the public on its premises or at its events. Employers' liability is legally required if you have employees. TII is genuinely optional in every UK jurisdiction.

Will my CIO’s limited liability protect me without TII?

Limited liability protects you against external claims that exceed charity assets (e.g. a creditor cannot pursue you personally for the charity's unpaid bills). It does not protect you from claims by the charity itself — if the Charity Commission or your fellow trustees allege you breached your duties, you can be sued personally for the loss. TII addresses that exposure; limited liability does not.

Will TII cover me against criminal proceedings?

Defence costs are covered up to the point of conviction. Once a trustee is convicted of fraud, dishonesty or wilful misconduct, TII does not cover the criminal fine, the resulting civil damages, or the post-conviction defence. This is mandated by s.189(4) Charities Act 2011 and reflected in every compliant UK policy.

Can the charity pay the premium from charitable funds?

Yes, under s.189 Charities Act 2011 (England & Wales), s.68A Charities and Trustee Investment (Scotland) Act 2005, and equivalent NI provisions. Subject to four CC49 conditions: not forbidden by the governing document, premium proportionate to resources, policy excludes the statutory prohibitions, and trustees satisfied the purchase is in the charity's interests. See trustee indemnity and the Charity Commission for the detail.

Does TII run on after I retire as a trustee?

Most charity-tailored TII policies include run-off cover for claims made after a trustee has retired but relating to their period of service. Ecclesiastical includes six-year run-off as standard; other insurers vary. If you are retiring from a board, confirm with the broker what happens to your personal cover going forward.

Related guides

Sources

Charity Commission guidance CC49 Charities and Insurance
Charities Act 2011 s.189 (statutory power to buy TII); s.189(4) (mandatory exclusions)
Charities Act 2022 (substantive TII regime unchanged)
Charities and Trustee Investment (Scotland) Act 2005 s.68A (inserted by Public Services Reform (Scotland) Act 2010 s.127)
OSCR guidance on trustee insurance (June 2024)
Charity Commission Operational Guidance OG 100
The Official Receiver v Atkinson & Ors [2021] EWHC 175 (Ch) — Kids Company disqualification application
Charity Commission, Inquiry Report: The Captain Tom Foundation, 21 November 2024
Markel, PolicyBee, Zurich, Ecclesiastical and Ansvar standard policy wordings

General information, not legal or insurance advice. For a binding view on your specific charity, speak to a regulated broker.