Caught out! Here are the 3 problem scenarios for which trustees may not realise they’re liable for.
Charity trustees have several responsibilities in their board role which also carry with them liabilities.
If the charity is not incorporated, trustees may be personally liable in a few situations.
For many trustees, this will come as a shock (and it’s why it’s important to check your governing documents to see the level of your current liability).
Governance-related liability, such as misconduct or financial irregularities, are liabilities you would expect.
But here are 3 situations where you may be personally liable as a trustee:
Debts
This is one of the organisational liabilities that may arise because of running activity that hires suppliers and staff.
Should the charity not be able to fulfil its debt obligations, there is a chance trustees will be held jointly liable for the debt.
Injury claims
Should a volunteer be injured in the course of their activities, or someone was hurt while on charity premises, there may be a claim. This could become a liability where trustees could be held personally liable.
‘Vicarious’ liability
You may be personally liable as a trustee of the charity for the wrongful actions of staff or volunteers, even if their actions haven’t been expressly sanctioned.
This is a more complicated area of law. There are several tests in relation to what is done in the course of employment and the connection between the task and the conduct that causes a claim. It is still a serious area to consider.
Again, all these situations may already be covered by your governing documents and/or insurance cover.
But when exposure to personal liability means your savings, home and personal wealth is under threat, it is worth checking this as soon as possible to discover what your situation is.
If you need help with this, message me asap.
