Our insurance brokers are reviewing cover for our insurance renewal. We have long held Liability cover for £10m Public liability and £5m employers liability, but in the light of recent cases, we are advised that this may not be adequate.

We have a constitution but I wonder if there is anything in the 1965 or other Acts or any case law you are aware of which would help us to establish how liability, established against the Committee, might extend to individuals as committee members, trustees, staff or graziers.

We were wondering if immunities found in charities might be useful to Committee members and if we should apply to the Charities Commissioners for charitable status.

 

Comments

We  have talked to a solicitor who specializes in common land. He has made inquiries regarding liability with respect to livestock claims and has concluded that while the owner is the first person against whom a claim would be taken the committee are potentially liable and they should take out insurance.

In terms of Trustee liability for a charity the following is taken from the National Council for Voluntary Organisations.

Trustee liability

It is very rare for a charity trustee who acts reasonably and in good faith to be held personally financially liable for their actions.

Trustees who act prudently, lawfully and in accordance with the charity’s governing document can generally seek reimbursement of any personal liabilities out of the charity’s resources.

However, liability is a concern and it is important for all trustees to be aware of the situation.

Trustees can potentially be held liable for breaches of their duties – for example, if they act outside the governing document or fail to follow a statutory or legal requirement.

Trustees can also potentially be liable to third parties and, in some cases, for the debts of the charity. A trustee’s liability for the charity’s debts depends mainly on the legal structure of the charity – whether it is incorporated or unincorporated.

There are a range of methods available to minimise personal liability. The most effective way of minimising liability is to use an incorporated structure and to insure and follow good governance practice and ensure trustees are following their duties and responsibilities.