Growing litigation culture increases threat to charities
Howard Lake | 19 June 2006 | News
Charities need to ensure they have protected themselves fully against the growing litigation culture in the UK, a specialist insurer has warned.
Angel Underwriting Ltd says that charity trustees and managers without Directors and Officers insurance are leaving themselves wide open to attack should a situation arise that results in legal action being taken against their charity based on a decision they made.
According to the company, which is working with insurance brokers across the UK to provide specialist, cost effective insurance cover specifically for smaller charities, many trustees and managers are unaware they have joint and several liability in law and are open to personal liability claims – whether or not
they were directly involved in the decision that lead to the claim.
Whilst the larger, well established charities usually have cover in place for their trustees, there is, according to the company, a great many people with leading roles in smaller charities across the UK who remain uninsured.
“It goes without saying that charities and not-for-profit organisations and the people who run them perform exceptional service for the good of others, through their devoted and unstinting work.
“But in their altruism it is easy for them to overlook the fact that they are exposed to potentially damaging actions from a wide variety of sources including staff, whether paid or voluntary, suppliers, customers, members of the public and, indeed, other trustees and officers.
“That their intentions are worthy and that they are selflessly working in the best interests of others can, unfortunately, blind them to the fact that the world is becoming increasingly hard-nosed where pursuing actions for damages are concerned.
In fact in the eyes of the law, charity Trustees and Directors have the same unlimited liability as normal Company Directors, non-executive directors who may have no responsibility for the day to day running of the charity and even someone who is not an appointed director but who regularly makes decisions and gives instructions to other directors.
“The growth in litigation is a reflection of the society in which we now live and the reality is that the threat of a charity facing a claim is growing. The fact that people within the charity are working fore the good of others is no defence where a failure and breakdown in the organisation is concerned and charity directors need to be alive to this,” added Mr Shreeve.
The company is advising charities to speak to their insurance brokers about providing its specialist D&O cover by visiting
www.angelunderwriting.com
or calling 0207 847 8600.
Ends 19 June 2006
Issued by Graham Buckley/Karen Adkins of Mercury PR on 01872 561120.
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.