Many New Zealanders who volunteer as trustees or board members of charities and incorporated societies don't realise they face significant personal liability. The law treats charitable trustees and society committee members similarly to company directors in many respects.
Legal Duties of Trustees
Trustees of NZ charitable trusts must act in the best interests of the trust and its beneficiaries, manage trust property responsibly, comply with the Trust Act 2019, and adhere to the Charities Act 2005.
Incorporated Societies Act 2022
The Incorporated Societies Act 2022 significantly updated the governance requirements for incorporated societies in NZ. Officers of incorporated societies can now face personal liability for serious governance failures.
Why Charity Trustees Often Go Uninsured
Many charitable organisations operate on tight budgets and governance insurance is often seen as a non-essential expense. However, D&O insurance for charitable trusts is typically very affordable — often $500–$800/year — and provides protection that volunteers and paid staff genuinely need.
Employment Claims Are the Most Common Risk
The most common claims against charity trustees in NZ relate to employment disputes — unfair dismissal, workplace harassment, and employment agreement breaches. These are covered under a management liability policy's employment practices section.