Virtually every practitioner holds or is likely to hold a Trusteeship appointment at some point in time.

Most Professional Indemnity policies restrict cover to legal advice given in that capacity, and do not necessarily apply to other claims that may arise while acting as a Trustee.

The JUSTITIA Professional Indemnity policy has for some years included a wider indemnity for directors or partners and employees who hold these appointments, but the extent of the coverage is limited to the "services" performed by the director or partner or employee concerned.

In addition, the terms and conditions of a Professional Indemnity policy are different from a tailored Trustees Liability policy, and do contain restrictions that are unique to Professional Indemnity cover.

For example: exclusions for insured versus insured and employer versus employee claims and exclusion for the liability for incurring trading debts.

Practitioners who accept appointments as trustees of clients’ trusts do face significant responsibilities and liabilities.

JUSTITIA is now pleased to announce that with immediate effect, Member Firms can apply for a special extended Trustees Liability policy, which provides cover for their representatives, in their capacity as serving trustees with far less exclusions than under Professional Indemnity cover.

The difference is that no "service" need to have been performed by the representative concerned, so the mere allegation of joint and several liability will be enough to provide indemnity – even if the actions of client co-trustees were taken without the representative’s knowledge, or involve an element of fraud.

In addition, certain exclusions such as claims from co-trustees or by employees of the trust have been removed to broaden the scope of the cover provided.

The salient features of the new policy are as follows:

It is aimed at picking up the residual risks that may fall outside the scope of Professional Indemnity cover as a "difference in conditions" contract to augment the Professional Indemnity cover.

It is designed to protect the practice representatives who hold Trusteeship positions on behalf of clients against claims alleging any "Wrongful Act" in the management of the trust by any of the trustees.

The term "Wrongful Act" means any actual or alleged breach of duty or trust, neglect, error, misstatement, misleading statement, omission or other act wrongfully committed or attempted by the member’s representative as trustee.

There are a few exclusions that apply. Primarily these are:

• Where provisions in the Trust Deed operate to exonerate the trustees from personal liability.
• The committing or condoning of dishonest or fraudulent or malicious acts by the Member’s representative.
• Liabilities assumed by agreement unless they are normally assumed by the trust and are owed at common law.
• Liability for physical loss or damage to third party property (i.e. this is the subject of other liability policies).
• A year 2000 exclusion.
• If the loss is covered under the JUSTITIA Professional Indemnity Policy.
• If any other collectable insurance is available to the Member.

This is an extremely wide backup form of protection for the Members who accept appointments as trustees.

- Refer to Indemnity Insurance Proposal Form
              (download: iproposal.doc 292 kb)