Professional Indemnity Insurance for Fiduciary Practitioners

Our analysis of the industry has shown that the current market offering falls short of providing Fiduciary Practitioners with the necessary levels of protection required.

In response to this, ShackletonRisk addresses the pressing need for a bespoke product which indemnifies Fiduciary Practitioners in respect of their legal liabilities to estates and trusts which they are administering.

This policy is easy to understand and provides protection for practitioners who face two core risks in their business as Executors, Curators and Trustees
• Professional Indemnity; and
• Misappropriation of Trust Funds

The sections of cover are also severable so that the practitioner can choose which cover he/she requires most.

Tailor-made Professional Indemnity Cover for Executors, Curators and Trustees of Trusts

Professional Indemnity

This section of the policy indemnifies the insured against its legal liability to pay compensation (including claimant’s costs, fees and expenses) as a result of any actual or alleged negligent act error, or omission which arises in the performance of their professional duties.

Unlike a standard PI Policy, we offer the following extensions:

  • A No Claims Discount where the premium in any subsequent year of renewal is reduced where no claims have been made;
  • An Interest-bearing Deposit Advice extension which covers the Insured for the loss of interest which an estate/trust loses when a claim is made
    because of the Insured’s failure to invest estate/trust moneys not immediately required for payment of any creditors/heirs/beneficiaries of the estate/trust, on interest-bearing deposit with a bank;
  • A Loss of Documents extension which indemnifies the Insured for all costs and expenses incurred in the replacement or restoration of any documents following loss or damage to them;
  • An Outside Directors and Officers extension which indemnifies the Insured for its legal liability to an outside entity in respect of any negligent expert estate administration advice given by the Insured, provided that any emoluments earned from the said advice accrue to the benefit of the Insured and are declared to the Insurer during the policy period.
  • An Investment Advice extension which indemnifies the Insured against claims arising from negligent investment advice given to heirs/ beneficiaries on the manner in which the estate/trust should invest its funds in order to receive a return on those funds.
  • A Tax Advice extension which indemnifies the Insured against claims arising from negligent tax advice where the Insured purports to advise on any taxable transactions, donations, disposals, tax relief, “taxation event” given its widest meaning, including but not limited to the restructuring of assets;
  • An Inter-Company Liability extension which indemnifies the Insured against claims arising from Subsidiary and Associated Group Companies where services are outsourced within the group and for which separate stand-alone contracts are in place and which demonstrate that these operations are at an “arm’s length” .
  • A Defamation extension which indemnifies the Insured against Defamation claims.

Misappropriation of Trust Fund Insurance

This section of the policy indemnifies the insured in respect of any legal liability incurred in reimbursement and/or replacement of funds and/or property belonging to an estate or trust where the claim arises out of theft, unauthorised borrowing or misappropriation of such funds and/or property by an Insured subject to the exclusions and provided that:

a claim is first made against the Insured by a third party, funds were held in a Third Party Trust Account; and the funds and/or Property had been entrusted to the Insured on behalf of the estate in his/her capacity as appointed Executor, Curator or Trustee of the estate or Trust and not as agent, or sub-contractor.

MOTF is offered in 3 ways:

  1. A blanket basis – where all employees are covered
  2. A named persons basis – where specific people in the company are named (thereby reducing the premium charged)
  3. A named positions basis -where specific positions in the company are named for e.g. only those employees in the finance department

Unlike conventional Misappropriation of Trust Fund Policies we offer the following extensions:

  • An Unidentifiable Employee extension which will apply where there has been a theft but the specific employee involved cannot be identified
  • A Computer Crime extension where a hacker circumvents the computer system of the insured and steals either property or funds from a Third
    Party Trust Account.

For more information or to set up a consultation, please contact either:

Richard Lynn – CA(SA) | +27 82 803 8495 | richard@srisk.co.za

Managing Director

Or

Johannesburg Office:

+27 11 784 5373 | info@srisk.co.za