T R U S T E E S ' E X P O S U R E
There are many types of non-charitable trust – heritage, family, trading, Maori, rest homes, hospitals, education services and the arts to name but a few.
As a trustee, your role is to protect and administer those funds. The position is one of considerable responsibility even though the role may not be a full-time one for you. Trusts that are not created by statute do not have legal capacity, which means that individual trustees can be held personally liable for the debts of the trust and all penalties awarded against it. Trusts that are created by statute do have legal capacity but rather than diminishing personal liability this means that trustees assume an exposure similar to company directors.
T H E S T A K E S A R E H I G H
This legal liability exposes all your personal assets. Everything that you’ve worked so hard for your home, your savings, your retirement plans – the results of years of focus and hard work. Today’s changing commercial
environment makes this ever more likely. • Increased Regulation
The commercial affairs of trusts are under increasing scrutiny from agencies such as the Commerce Commission, Inland Revenue Department and the Serious Fraud Office. The cost of legal representation can be significant – regardless of whether court action follows.
• Increased Litigation
Litigation is no longer something that “only happens overseas”. As individuals and companies become more aware of their rights, they increasingly turn to litigation to recover losses.
P R O T E C T Y O U R A S S E T S A N D Y O U R H O M E
Q B E – P R O V I D I N G I N D E P E N D E N T P R O T E C T I O N
At QBE we recognise the environment you operate in and our Trustees Liability insurance has been designed to protect your trust and all trustees by combining trust reimbursement with direct, independent protection. This means when your trust is responsible for indemnifying you under its trust deed, QBE’s Trustees
Liability is able to step in and pay you on the trust’s behalf. Moreover, if a situation arises whereby the trust is unable to indemnify (e.g. it is insolvent) the policy is still able to offer you direct, independent protection. It covers official investigations or inquiries, civil proceedings and even criminal proceedings as long as you are acquitted, plus your legal defence costs, settlements and court awards.
QBE’s Trustees Liability insurance has a wide definition of ‘Trustee’ and provides many valuable automatic extensions to cover, as standard.
A U T O M A T I C E X T E N S I O N S
Covers the costs and expenses incurred in defending you through official investigations and inquiries
The policy can extend to cover criminal prosecutions as long as you are acquitted.
To provide protection should you represent the trust on the board of another organisation.
With agreement from QBE, the policy meets the expense of legal costs as they are incurred.
Should an insured and an uninsured loss be entwined, QBE will work to agree a fair contribution towards the cost of simultaneously defending both losses. To protect your spouse or estate against allegations being made against you after the event of your death.
If your trust is in liquidation and so unable to indemnify you, your own right to direct indemnity from QBE remains intact.
Failure by an insured colleague to meet the terms of the policy will not automatically prejudice your own cover under it.
Rewards loyalty by protecting trustees where they have failed to notify a claim or circumstance under a previous policy, where QBE has been the continuous Trustee Liability insurer.
Protects trustees where they have innocently failed to comply with the disclosure provisions of the policy.
O P T I O N A L E X T E N S I O N
To ensure your policy can respond irrespective of when the alleged error was made.
This brochure does not attempt to provide full details of every aspect of cover, nor all exclusions or limitations which may apply. It is for information purposes only. For full details, please read our policy wordings, which are available from our local QBE office or agent, or your broker. Not all products are available in all markets. Q B E – T H E R E W H E N Y O U N E E D U S
In New Zealand, more people put their trust in QBE’s liability insurances than any other because when you face a liability claim, you need access to the best. And that’s what QBE seeks to provide.
Our experienced claims team have an in-depth understanding of the complex legal and commercial issues which surround liability claims and will negotiate settlements in consultation with you. Should you be sued, we can appoint some of the country’s best lawyers to help in your defence.
“I find so often when you place trust in someone in a professional
capacity things can go horribly wrong, and the situation which we were
faced with could have been just another example of this had it not been
for your help and understanding.”
“Your liability claims management team are
decisive and a pleasure to work with. Keep up
the good work.”
“Your overall service is excellent and your prompt
payment of claims is the best of any insurer I deal
with in New Zealand.”
“Thank you for your friendly and helpful service with our clients’ claims.”
C L A I M S S O U R C E SAs a trustee you can be held personally liable for
allegations made by a great number of people.
Beneficiaries may bring a number of actions against trustees, including for alleged:
• breach of the terms of the Trust Deed • failure to invest funds prudently
• breach of the rules concerning investment income contained in the Trust Deed
• favouring one beneficiary (or class of beneficiaries) over another
• failure to distribute trust assets in accordance with the Trust Deed
You could become the subject of investigations or prosecutions by bodies such as the Commerce
Commission, Securities or Inland Revenue Department.
A liquidator or receiver could sue you on behalf of the trust for alleged breaches of duties owed to the trust.
You could become personally liable to creditors.
Employees could instigate proceedings against you by alleging unfair dismissal, discrimination, sexual harassment, defamation or invasion of privacy.
Members of the Public
w w w . q b e . c o . n z
QBE New Zealand
QBE is the leading business insurer in New Zealand and companies in the QBE group have been providing insurance here since 1890.
Our products are managed by highly skilled and experienced professionals and distributed through selected intermediaries to both the corporate and commercial markets. We provide insurance solutions tailored to our clients’ needs, particularly in the corporate sector.
QBE operates a network of branches around New Zealand, which means our clients, wherever they are, enjoy accessibility, highly responsive decision making and local service.
Our full range of products can be viewed at our website.
We have offices throughout New Zealand: Auckland (09) 366 9920, Hamilton (07) 838 2504, Tauranga (07) 578 9002, Napier (06) 835 4565, Wellington (04) 472 5158,
Christchurch (03) 366 4629, Dunedin (03) 477 8057, Invercargill (03) 214 5120 For further details contact your insurance advisor or phone 0800 101 123 QBE Insurance (International) Ltd. Incorporated in NSW Australia. A member of the QBE Insurance Group.
Whilst our full range of products can be viewed at our website, we detail below some we believe might be particularly relevant for you and your trust.
Professional Indemnity – the term ‘professional’ applies to a wider spectrum of people than ever
before, all of whom can be sued for their mistakes. Professional Indemnity insurance can help cover the financial consequences of your errors, protecting your reputation and your livelihood.
General Liability – A cornerstone of your legal liability protection should be General Liability. QBE
offers a broad and well-written combination of public and product liability insurance that can help to protect your business following third party property damage or personal injury.
Statutory Liability – with legislation enacted and modified every year it is easy to unintentionally
find yourself in breach of the law. Whether health and safety, maritime, consumer, privacy or environmental, your Statutory Liability policy can pay for legal defence costs and most fines that may be awarded against you.
Employers Liability – ACC does not cover gradual process claims, nervous shock or fright, food