International specialty re/insurance MGA Rokstone has introduced two new extensions to its Family Trustee Liability product.
Rokstone says that these enhancements aim to address gaps in existing policies that expose trust assets to potential financial losses associated with non-professional trusteeship.
The new Exoneration and Beddoe Costs extensions provide additional protection for trust assets. The Exoneration extension safeguards trust assets when trustees’ personal liability is already covered under the trust’s deeds.
The Beddoe Costs extension covers situations where trust assets are at risk during the pursuit of a Beddoe order, a legal approval trustees can seek from a court to preemptively validate a contentious action.
According to Rokstone, the UK has over 600,000 family trusts and estates, but only a small percentage currently have Family Trustee Liability coverage. This creates a significant market opportunity for brokers, particularly those specializing in directors and officers liability (D&O), professional indemnity (PI), or rural estates, which are often closely associated with such coverage.
Jimmy Heaton (pictured above), head of D&O at Rokstone, highlighted the complexities faced by non-professional family trustees.
“Similarly, the trust’s assets are often exposed to potential trustee negligence where rights of recourse against a trustee may be ‘blocked’ by an exoneration clause in the trust’s deeds,” Heaton said.
The policy enhancements include reimbursement of the trust fund in cases where trustees are personally exonerated, ensuring that both trust assets and trustees benefit from the added protections.
Heaton described the enhanced product as a tool for brokers to meet growing client demand for niche specialty risk coverage, emphasizing its role in safeguarding trust assets and providing trustees with the confidence to fulfill their responsibilities.
Family trustees managing trust assets face risks ranging from allegations of breaches of trust and self-dealing to family disputes and trust asset mismanagement. Additional challenges include navigating complex tax and asset reporting requirements.
Roksone says that the new extensions directly address these exposures, offering financial protection for trustees and balance sheet security for trusts.
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