Insurance · Decision aid · 2026
Trustee indemnity insurance: do you actually need it?
A decision aid for trustees, CIO boards and CIC directors. What it covers, what it doesn't, what the Charities Act actually requires — and when the honest answer is no.
Last updated 16 May 2026·11 min read
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What trustee indemnity insurance is — and isn't
Trustee indemnity insurance (TII) — also marketed as charity trustees' liability, charity D&O or simply management liability — is a personal liability policy issued in the name of the charity, but for the benefit of named or class-of trustees, directors and officers. The Charity Commission's guidance (CC49) defines it as cover for personal liability arising from “a breach of trust, or a breach of duty or negligence committed by them in their capacity as trustees”.
Mechanically it's a wrongful-acts policy, similar to commercial directors' and officers' cover, but with a wording adapted to charity-law duties (Charities Act 2011 s.189) and the not-for-profit risk profile. For incorporated charities (CIOs, charitable companies), it bundles both charity-law trustee duties and Companies Act director duties into a single section.
It is nota substitute for good governance, and as the Captain Tom Foundation case demonstrates, it does not protect trustees from disqualification for self-dealing, unauthorised personal benefit, or any conduct the trustee knew was outside the charity's interests.
The decision matrix: who actually needs it
| Your structure | Honest recommendation |
|---|---|
| Unincorporated, <£5k income, no employees, no premises | TII is usually disproportionate. Public liability is the first priority. Consider incorporation to a CIO before insurance. |
| Unincorporated village hall, <£250k income | Bundle TII into the village-hall package policy if offered. ACRE-aligned brokers will include it almost as a matter of course. |
| CIO (Charitable Incorporated Organisation), any size | Useful for regulatory-defence costs (Charity Commission investigation, ICO penalty defence). Not essential for asset protection — limited liability handles that — but cheap enough to bundle. |
| Charitable company limited by guarantee | Strongly recommended. Almost universally bundled into modern charity package policies. Companies Act director duties + Charities Act trustee duties = double exposure. |
| CIC (limited by guarantee or shares) | Buy a CIC-aware D&O / trustees' liability policy (Markel, Zurich offer one). CIC Regulator action is a real exposure. |
| Any charity working with children or vulnerable adults | Essential, plus safeguarding-aware professional indemnity. The DBS / safeguarding regulatory exposure is now meaningful. |
| Any charity giving advice or providing services | TII plus charity-specific professional indemnity. Negligent-advice claims are the most likely exposure for advice charities. |
What it covers
Drawing on the Markel, PolicyBee, Zurich, Ecclesiastical and Ansvar policy descriptions, a standard charity TII wording covers:
- Defence costs for civil claims alleging breach of trust, breach of fiduciary duty, negligence, mismanagement, wrongful act or maladministration
- Damages and compensation awarded in civil proceedings, up to the policy limit
- Costs of defending regulatory investigations (Charity Commission, OSCR, CCNI, ICO, HSE) and disqualification proceedings
- Costs of defending criminal proceedings up to the point of conviction
- Defamation and libel/slander defence (often sub-limited; Zurich includes £100,000 standard)
- PR / crisis-communication costs (Markel, Ecclesiastical, Ansvar)
- Run-off cover for retired trustees (Ecclesiastical: six years standard)
- Entity defence for the charity itself, where TII is bundled with the entity policy
What it doesn't cover — the exclusions that surprise people
The exclusion list is partly mandated by s.189(4) of the Charities Act 2011 and CC49. No UK policy can lawfully cover the following:
- Fines imposed in criminal or regulatory proceedings (Charity Commission, ICO, HSE, Companies House, FCA)
- Liability arising from criminal proceedings where the trustee is convicted of fraud, dishonesty or wilful misconduct
- Conduct the trustee knew, or ought to have known, was not in the interests of the charity
- Deliberate or dishonest acts
- Prior known circumstances and prior claims
- Bodily injury and property damage (covered by public liability, separately)
- Faulty professional advice given for a fee (covered by professional indemnity, separately)
- Contractual liabilities the trustee personally assumed
- US-jurisdiction claims (most policies)
The most common misunderstanding among trustees of unincorporated charities: CC49 expressly notes that TII “will not normally cover them against the risk of personal liability arising from contracts they have entered into on behalf of their charities”. Trustees of unincorporated bodies hold contracts personally — for which the only real fix is incorporation.
The CC49 framework — paying the premium from charity funds
English and Welsh trustees have a statutory power to pay the TII premium from charity funds (Charities Act 2011 s.189). CC49 sets out four conditions:
- The charity's governing document must not explicitly forbid the purchase (very rare).
- The premium must be reasonable in the context of the charity's resources.
- The policy wording must exclude the statutorily prohibited indemnities (fines, fraud, conduct known not to be in the charity's interests).
- Trustees must be satisfied the cover is in the best interests of the charity — not merely of themselves.
Every UK charity insurer's standard wording already complies with the statutory exclusion list. The live question for trustees is condition 2 (proportionality) and condition 4 (whose interests this serves). The minute book should record that trustees considered the four conditions and reached a reasoned decision.
Scotland: equivalent statutory power under s.68A of the Charities and Trustee Investment (Scotland) Act 2005 (inserted by s.127 of the Public Services Reform (Scotland) Act 2010). OSCR's guidance closely tracks CC49.
Northern Ireland: Charities Act (NI) 2008 contains analogous provisions; CCNI guidance tracks CC49.
What it costs in 2026
Almost every published price for TII is bundled with other cover. Standalone TII pricing is rare in the small-charity market because providers know the policy makes more sense packaged.
Smallest charity bundle
From £36 / year
Markel Direct: £500k professional indemnity + trustees' liability, sub-£10k turnover.
Standalone trustee liability
From £198 / year
Get Indemnity (via WTW network), £100k–£500k limit.
Charity package + TII add-on
£56–£500 / year
Zurich Charity package starts £56/year; TII add-on adds an uplift depending on limit.
Mid-size charity (incorporated)
£500–£2,000 / year
£1m+ TII limit, regulatory investigation defence cover, run-off included.
Premium drivers in this market: annual income / turnover, number of trustees, activity risk profile (children, vulnerable adults, advice work), prior claims history, governance quality (up-to-date accounts, annual return filed on time), structure (incorporated vs unincorporated), reserve levels, and chosen limit.
The six providers worth comparing
| Provider | Underwriter | Price from | Why it's on this list |
|---|---|---|---|
| PolicyBeeAffiliate | Ansvar, Hiscox and others | Quote online | Online quote-and-buy for charities under £500k income. Strongest digital journey for small-charity trustee liability. Refer-a-friend reward scheme. |
| Markel DirectAffiliate | Markel International (Lloyd's 3000) | From £3/month | Bundles trustees' liability with professional indemnity for small CIC, charity and community-group profiles. Direct online quote. |
| Zurich Charity | Zurich Insurance | From £56/year (package) | Online for charities under £100k income. £2m public liability + £100k libel/slander standard; trustees' indemnity is an optional add-on. |
| Ecclesiastical | Ecclesiastical (Benefact Group) | Broker quote | Limits £250k–£5m, six-year run-off cover included. Distributed via Access Insurance and a wider broker network. Faith and heritage strong. |
| Ansvar (Charity Protect) | Ansvar (Benefact Group) | Broker quote | Faith-linked, charity-sector specialist. Sub-£100k income, sub-£500k assets, sub-100 volunteers profile. Trustees' indemnity included. |
| Get Indemnity (WTW network) | Various via WTW | From £198/year | Broker route via the Willis Towers Watson network. Publishes a transparent starting price — rare in this market. |
Five misconceptions worth correcting
“TII will cover me if I breach charity law.”
Only honest, non-deliberate breaches. It does not cover conduct the trustee knew or ought to have known was not in the charity’s interest.
“Our employers’ liability covers our trustees.”
No. EL covers injuries to staff and volunteers. Trustee duties are a separate exposure under charity and company law.
“TII includes regulatory fines.”
Statutorily barred by s.189(4) of the Charities Act 2011. No UK policy can cover fines.
“We’re a CIO/charitable company — trustees are protected by limited liability anyway.”
Limited liability protects trustees from external creditors. It does not protect them from claims brought by the charity itself for breach of duty.
“We’re too small to need it.”
Often true for sub-£5k unincorporated groups. But even an unfounded claim is expensive to defend. Sub-£200/year is typical for a small charity bundle — cheap insurance against an asymmetric downside.
How to actually buy it
- Confirm your structure first.If you're unincorporated and under £25k, consider incorporation to a CIO before buying TII. The legal protection of incorporation is worth more than the insurance.
- Read your existing package policy schedule. Find the “Financial & Administration Liability” or “Trustees' Indemnity” section. Note the limit and the wording.
- Get two quotes minimum. One from a digital broker (PolicyBee or Markel Direct) and one from your existing package broker as an add-on uplift. Same limit, same activity disclosure.
- Pick the limit honestly. £250k–£500k for a small grant-funded charity. £1m+ for advice charities or those working with vulnerable people. £2m+ for sizeable advocacy or campaigning organisations.
- Record the s.189 decision. Trustees should record in the minute book that they considered the four CC49 conditions and were satisfied. Cheap protection against any future Commission scrutiny.
Frequently asked questions
Is trustee indemnity insurance a legal requirement?+
No. Public liability and employers' liability can be (in practice if not law); TII is always optional. But s.189 of the Charities Act 2011 explicitly permits a charity to pay the premium from charity funds, subject to four conditions: the governing document doesn't forbid it, the premium is reasonable, the wording excludes the statutorily prohibited indemnities, and trustees are satisfied the cover is in the charity's best interests.
What's the difference between TII and directors' & officers' (D&O) insurance?+
Mechanically very similar — both are wrongful-acts policies for personal liability. The difference is the wording. A bare commercial D&O policy from a generic SME broker usually excludes charity-specific wrongful acts (Charity Commission action, breach of charity-law duties). A charity-tailored TII policy bundles both charity-law and Companies Act duties for incorporated charities (CIOs, charitable companies, CICs).
If we already have a charity package policy, isn't trustee liability already included?+
Often as an optional add-on, not as standard. Check your schedule for a 'Financial & Administration Liability' or 'Trustees' Indemnity' section with a real limit (typically £100k–£1m). If the box is empty or the limit is symbolic (£10k), you don't really have it.
How much should we expect to pay?+
For very small charities and CICs, bundled trustee liability + professional indemnity starts at £3/month (Markel Direct, £500k limit, sub-£10k turnover) or £36/year. Standalone trustee indemnity from Get Indemnity starts at £198/year. Larger charities or higher limits run £500–£2,000/year. Brokers don't publish detailed price grids because almost every quote is bundled with other cover.
Will TII cover us if we're investigated by the Charity Commission?+
Yes — defence costs for regulatory investigations and disqualification proceedings are usually included. It will not cover any fine imposed, and it will not cover conduct found to be deliberate misconduct (see the Captain Tom Foundation finding — conduct described by the Commission as 'unauthorised trustee benefit' is exactly what TII does not cover).
What happens to cover after we retire as trustees?+
Look for run-off cover in the wording. Ecclesiastical includes six-year run-off as standard. Six years matches the standard civil claim limitation period in England & Wales. If the wording is silent, ask before you sign.
Related guides
Trustee indemnity insurance cost in 2026 →
The real price bands by charity size and limit, and why nobody publishes a standalone price grid.
Best trustee indemnity insurance providers →
A side-by-side of PolicyBee, Markel, Zurich, Ecclesiastical and Ansvar.
What does trustee indemnity insurance actually cover? →
Section by section, with the exclusion list trustees keep missing.
UK community group legal structures, compared →
Why incorporation often beats insurance as the first move.
Village hall insurance: a 2026 buyer's guide →
If you're a trustee of a village hall, the package policy is usually the better route.
Sources
Charity Commission CC49 (Charities and Insurance); Charities Act 2011 ss.189, 280A–B; Charities Act 2022; Charities and Trustee Investment (Scotland) Act 2005 s.68A; OSCR guidance (June 2024); CCNI guidance; The Official Receiver v Atkinson & Ors [2021] EWHC 175 (Kids Company); Captain Tom Foundation Charity Commission statutory inquiry report (Nov 2024); provider policy wordings (Markel, PolicyBee, Zurich, Ecclesiastical, Ansvar, Unity Insurance Services, Get Indemnity); Civil Society; Russell-Cooke and Bates Wells trustee briefings.