Charity should begin at home and maybe it should stay at home, according to Lloyd's liability specialists RE Brown Underwriting.

The company has not decided to indulge in some pre-Christmas humbug. Instead it is warning of the liability issues facing people who take on voluntary work as trustees of charities.

"In their admirable efforts to help others, individual trustees may not realise that they stand to personally cough up if they are found guilty of wrongdoing," said managing director Steve Carroll.

He is warning those thinking of getting involved are already working for good causes to make sure they are covered under trustee liability insurance by the charity concerned.

Trustees of charities can be personally liable for costs in defending a legal action, and for subsequent damages, judgements and settlements awarded, he added.

"Legal action generally is becoming more common in today's society, he said. "This is a worrying trend, particularly as an increasing number of charities become more actively involved in the provision of social and welfare services, as well as professional advice, in an effort to generate much needed income.

"There is a misconception among some charities that the possession of charitable status makes them immune to legal liability. That is definitely not the case."

Being kind-hearted and charitable is not a defence, according to Carroll. "Those helping others should make sure they are not in danger of suffering financial hurt themselves."

A catalogue of charity hardship cases
There have been a number of instances where the good-intentioned working for charities have ended up in hot water.

1: "Shock" press adverts were ruled not to be for charitable purposes by The Charity Commission which ordered trustees to reimburse the £30,000 cost of the campaign to charity funds.

2: A charity chief executive misappropriated a gift donation of £50,000. The donor brought a legal action to hold the trustees personally liable.

3: A resident of charity-run home attacked another resident. A report highlighted a number of security failures at the home and now the trustees are being pursued by the injured party for negligence.

4: An investment manager was retained to manage trust funds but he made unauthorised and unwise. investment decisions. The charity lost £250,000. The trustees had not obtained permission from the Charity Commissioner to allow them to delegate their powers of investment. The charity's beneficiaries brought proceedings against the trustees. The investment manager disappeared.