Hit enter to search or ESC to close
Trustees liability insurance provides protection against allegations that a trustee, trust secretary or other officer has committed a wrongful act in carrying out their duties.
Being a trustee comes with a lot of duties and responsibilities. Whether you are the custodian of a large trust, managing a family company, overseeing an owned property, sitting on the board of a public or private foundation, there are bound to be disagreements that could be the cause of potential liabilities for you. That’s why it’s crucial for trustees to protect their personal assets.
Investing in trustees' liability insurance should be one of the first decisions you make as a new trustee.
Any person who serves as a trustee or is a secretary or other officer of a trust needs liability cover. Trusts come in many shapes and sizes, presenting their trustees and service providers with a variety of duties. One thing trusts all have in common though, is that trustees can be held legally accountable for any decisions that they make and for any services provided.
Trustees’ liability insurance can provide cover for:
Trustee liability insurance is designed to protect you and your personal assets from legal actions arising from your duties as a trustee, to the extent that they are not already indemnified by the trust.
Claims against trustees can allege:
Trustees’ liability insurance also covers the trust itself for the cost of reimbursing the individual trustees.
Making an error on a seemingly minor decision can put trustees at risk of compensation claims, legal action or official investigations being directed towards them personally. These claims can be financially crippling to defend.
Our brokers can advise you on the right trustees’ liability cover for you. They can work with you to create a tailored, cost-effective insurance liability package and in the event of a claim, work with you on a resolution.
A discretionary family trust stipulated that capital held in the trust was to be vested in the three sons of the settlor on a specified date, based on the youngest son turning 30 years, but with the provision that the assets could remain in the trust beyond the vesting date if the beneficiaries agreed.
The vesting date came but the settlor advised the trustees that he wished the funds to remain in the trust because certain investments owned by the trust did not mature until after the vesting date. He told the trustees that his sons, the beneficiaries, were happy with this. However, one of the sons, who was in marital strife, approached the trustees with a demand that the funds be distributed, or at least his share.
The trustees then received a formal claim stating they had breached their duty to the trust by not distributing the funds on the vesting date.
The claim amount was based on the reduced value of funds available for distribution because, in the interim, the value of the trust funds had diminished in the prevailing financial market conditions. The trustees had failed in their duty; and negotiation with the beneficiaries produced an agreed settlement. Legal costs were also covered.
Public and product liability insurance minimises the financial impact on a business should the unexpected happen
Product liability insurance protects against claims of personal injury or property damage caused by a business
Directors and officers insurance protects your executives and board from personal financial risk
Statutory liability insurance can protect businesses against certain unintentional breaches of New Zealand law
An employers liability policy protects employers against claims brought by their employees who have sustained an injury where the ACC does not provide cover
Employment disputes insurance protects employers against personal grievance claims brought by past or present employees
Crime and fidelity insurance protect organisations from losses which could arise from dishonest or fraudulent acts committed by employees
Professional indemnity insurance is designed for professionals who provide advice
Trustees liability insurance protects trustees from personal liability while carrying out duties performed for the trust