Individual Trustee Liability

Did you know that when you serve as a Trustee, you are serving personally? Although you may also be serving in a professional capacity as a lawyer, CPA, business associate or even a private trust company, trustees are subject to Fiduciary standards—the highest duty under the law—and are personally liable.

The nuances and confusion surrounding this role and its risks prevent many from getting the personal coverage they need. Having a knowledgeable underwriter who understands trusts is critical to ensuring you’re properly covered.

Trustee Liability Considerations 

More often than not, there are misconceptions around the role of a trustee. Did you know:

  • Trustee liability risk does not fall within personal lines insurance.
  • For individual trustees, your employers’ insurance may not cover you when you’re serving as a trustee. And if they do, and the deductible is upwards of $1 million, they may or may not indemnify you for the deductible amount.
  • The definition of “trustee” in your employer’s policy may not be broad enough to cover all of your roles and responsibilities when serving as trustee.
  • Trust assets can’t always be used to indemnify a trustee in the event of a claim.
  • If you’re serving as a committee member, director or officer of a private trust company or member of an LLC , you may  have the same liability as an individual trustee.

Woodruff Sawyer can help identify gaps in coverage, exclusions that should be deleted, or places where professional services may be defined inaccurately. We’ve created an insurance program specifically geared to protect trustees, and our application process makes obtaining coverage easy.

Our Product Offering

Coverage is available for Trustees administering assets of over $5 million and includes the following:

  • Limits of Liability up to $5 million 
  • Cyber liability 
  • Blanket coverage for trusts 
  • Claims made & reported liability 
  • Broad definition of trustee duties 
  • Advancement of defense costs, including intentional misconduct and gross negligence until final adjudication of allegations 
  • Emotional distress 
  • No failure to effect or maintain insurance exclusion 
  • Prior acts coverage available 
  • 80/20 Hammer Clause 
  • Worldwide Coverage 
  • Coverage available for SPVs 
  • Employee theft available 
  • General liability on claims-made basis 

We invite you to apply for trustee liability coverage using our established underwriter-approved process. 

What is a private trust company and how does individual trustee liability coverage apply?
  • A private trust company is organized either as an LLC or a corporation to provide trust services exclusively for one family’s assets. More specifically, the private trust company serves as trustee for individual trusts.
  • Private trust companies can be regulated (supervised) or unregulated.
  • A board or managers of the private trust company LLC in turn delegates trustee responsibilities to committees.
  • Committees manage the fiduciary activities and decisions regarding investments, distributions, and administration.
The Individual  Trustee Liability coverage we offer provides a broad policy to cover members of the LLC, committee members, and directors and officers of the private trust company for their service as trustees of the private trust company.

Got Questions? Contact Us:

Judy Pearson Headshot

Judy Pearson
Family Office & Trustee Liability Group Leader  


Trustees: Your Personal Assets Are At Risk

“My experience in the fiduciary industry is that trustees have a panoply of risk – some recognized, others, less obvious. Judy Pearson and Woodruff Sawyer demonstrate a level of subject matter expertise and advisory acumen that adds great value to clients managing and mitigating fiduciary risks. Judy and the team are thought leading professions who place the client at center of all they do!”