Professional Indemnity Insurance for Fiduciary Practitioners

Insurance Structured Around Fiduciary Responsibilities

Fiduciary liability insurance for Executors, Curators, and Trustees is structured to respond, subject to policy terms, conditions, exclusions, and limits, to two core areas of risk commonly associated with fiduciary appointments:

• Professional Indemnity
• Misappropriation of Trust Funds

These sections are typically arranged separately, allowing practitioners to select cover that reflects their specific role, activities, and risk exposure.

Professional Indemnity Cover

Professional Indemnity insurance for fiduciary practitioners is designed to respond, subject to the policy wording, to civil liability arising from actual or alleged negligent acts, errors, or omissions committed in the performance of professional fiduciary duties. This may include associated legal defence costs and expenses, where applicable.

Depending on the practitioner’s activities and underwriting acceptance, a range of extensions may be available to enhance cover, including:

• Interest-bearing Deposit Advice – Claims arising from the loss of interest suffered by an estate or trust due to a failure to invest funds, subject to policy terms.
• Loss of Documents – Costs associated with replacing or restoring lost or damaged documents.
• Outside Directors and Officers’ Liability – Liability arising from negligent estate administration advice provided to outside entities, where emoluments are declared and accepted by insurers.
• Investment Advice – Claims arising from negligent investment advice given to heirs or beneficiaries.
• Tax Advice – Claims arising from negligent tax advice in relation to taxable transactions or asset restructuring.
• Inter-Company Liability – Claims brought by subsidiary or associated group companies for outsourced services conducted on an arm’s-length basis.
• Defamation – Claims arising from alleged defamation, subject to policy terms.

Availability of extensions is subject to insurer underwriting, policy terms, conditions, and applicable sub-limits.

Misappropriation of Trust Funds (MOTF)

Misappropriation of Trust Funds insurance is designed to respond, subject to exclusions and conditions, to certain legal liabilities arising from the reimbursement or replacement of money or property belonging to an estate or trust. Such claims may arise from theft, unauthorised borrowing, or misappropriation by an insured in the course of performing fiduciary duties.

For cover to apply, specific conditions typically include:

• A claim must be made against the insured by a third party.
• Funds or property must have been held in a designated Third Party Trust Account.
• The funds or property must have been entrusted to the insured in their capacity as an appointed Executor, Curator, or Trustee, and not as an agent or subcontractor.

MOTF cover may be structured in the following ways, subject to underwriting acceptance:

• Blanket Basis – Cover for all employees within the organisation.
• Named Persons Basis – Cover limited to specific named individuals.
• Named Positions Basis – Cover limited to specific roles, such as finance or bookkeeping positions.

Additional extensions may be available, including:

• Unidentifiable Employee Extension – Where theft has occurred but the specific employee responsible cannot be identified.
• Computer Crime Extension – Losses arising from cyber-related incidents involving fraudulent access to trust accounts.

All MOTF cover and extensions are subject to insurer underwriting, policy terms, conditions, exclusions, and applicable sub-limits.

How Shackleton Risk Can Assist

Shackleton Risk Management acts as a licensed financial services provider and insurance broker, assisting fiduciary practitioners in arranging appropriate insurance solutions that reflect their professional duties, regulatory obligations, and risk exposure.

Our role is to provide clarity in a complex insurance environment by advising on suitable cover structures and facilitating access to specialist insurers, subject to underwriting criteria and policy terms.

For more information on professional indemnity insurance for fiduciary practitioners, or to discuss suitable cover options, please contact your broker.