The Management Committee is responsible for ensuring that any terms and conditions within these contracts are reasonable when the contract is signed and complied with. They also need to be aware of the potential consequences of failing to meet their contractual obligations.
Organisations enter into various contractual agreements whilst carrying out their business. These contracts may include, for example:
Click here for further guidance to help you to understand your legal structure.
Organisations in the sector are split between incorporated and unincorporated organisations (click here for explanation of these legal terms). The sections below explain the impact these structures have on the personal liability of management committee members.
Trustee Indemnity Insurance is a policy that protects Management Committee members in the event of claims against them personally. The term ‘trustee' refers to Management Committee member of a charity, but the insurance is generally available to non-charitable organisations as well.
The precise scope and restriction of the cover will depend on the terms of the policy. However, once again this insurance will not cover Management Committee members where personal loss is as a result of negligence on the part of any of the Management Committee.