The law imposes on trustees a number of duties that they must carry out using the care, skill and diligence that a prudent person of business would exercise in managing the affairs of others.
Failure by trustees to discharge these obligations to the required standard, or at all, can result in the trustees being held personally liable. In addition, in certain circumstances, liability can be incurred for the activities of fellow trustees. While the trust may provide an indemnity to the trustees for claims made against them, the cost to the trust of meeting this obligation can in turn provide an undesirable burden on the trust’s assets.
A Trustees’ policy will address the concerns and liabilities of both the trustee, and the trust when indemnifying the trustee.
Trustees’ Liability insurance can provide cover for:
- Individual trustees and corporate trustees (if declared)
- Judgements and settlements
- Fidelity cover to protect trust assets against theft or fraud by a trustee
- Defence costs
- Costs to appear at inquiries or investigations
Marsh can tailor the Trustees’ Liability insurance cover to form part of a comprehensive risk management programme designed to provide protection against the exposures the trust and its trustees face.