Quick answer: Trustee indemnity insurance is designed to respond to certain claims made against trustees in their official capacity, but the exact protection depends on the policy wording.
Why trustees need to understand this cover
- Trustees approve budgets, claims decisions, maintenance actions and owner communications.
- Disputes can arise where owners believe trustees acted incorrectly.
- The policy wording should be checked so trustees know what is and is not covered.
What it may cover
- Defence costs for certain claims against trustees.
- Claims arising from alleged wrongful acts in the trustee role.
- Certain errors, omissions or governance-related disputes, depending on wording.
What it usually does not protect
- Dishonest, fraudulent or intentional unlawful conduct.
- Personal activities outside the trustee role.
- Known disputes or circumstances not disclosed to the insurer.
- Matters excluded by the specific policy wording.
Trustee checklist
- Confirm whether trustee indemnity is included or separately arranged.
- Check the limit of indemnity.
- Check who is defined as an insured person.
- Check exclusions and notification conditions.
- Keep minutes of important decisions and reasons.
Good governance reduces risk
- Record decisions properly.
- Declare conflicts of interest.
- Follow scheme rules and legal processes.
- Get professional advice for high-risk decisions.
- Communicate clearly with owners.
This page is general information for trustees and managing agents. It is not legal advice and does not replace the policy wording, scheme rules or professional advice for a specific claim or renewal.
Frequently asked questions
Is trustee indemnity compulsory?
Requirements and best practice should be checked against the scheme’s position and professional advice. Many schemes treat it as an important protection.
Does it cover poor maintenance decisions?
It depends on the wording and facts. Insurance is not a replacement for proper maintenance planning.
Can former trustees be covered?
Some policies may include former trustees, but the definition of insured persons must be checked.