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In recent years, the number of duties and obligations placed on trustees has grown as a result of government intervention, making the role of trustee more onerous than ever. Trustees who breach these increasingly complex responsibilities may place their personal assets at risk or, in certain circumstances, find themselves liable for civil and criminal penalties.

This personal liability stays with a trustee to the grave and, arguably, beyond. Add to the mix a generally more litigious society, scheme members becoming more aware of their pension rights, adverse market conditions and the ever increasing profile of pensions in the news and it is easy to understand trustees’ interest in the protections available to them. Chubb Pension Trustee Liability insurance provides valuable protection for the assets of individual trustees, the pension fund, the sponsoring employer and the employees against claims of wrongdoing.

Product highlights

  • Provides trustees and the sponsoring employer with the confidence to perform their roles secure in the knowledge that they have considerable protection
  • Can advance funding to cover defence costs, in addition to providing cover for settlement of an action if required


Our standard policy has a broad definition of wrongful acts and will pay for (among others):

  • Damages, judgments, expenses and defence costs
  • Costs of legal representation

It covers a comprehensive range of allegations, including:

  • Breach of trust
  • Breach of duty
  • Breach of statutory provision
  • Maladministration
  • Negligence
  • Administration errors
  • Wrongful omissions
  • Misstatements or misleading statements


Case study

To help you talk to your clients about the need for and benefits of Pension Trustee Liability insurance, here is a real example of a recent incident:

Trustees sued by scheme members

Trustees were responsible for a transfer of funds into a new pension scheme following the sponsoring employer’s disposal of a subsidiary. The rules required the amount to be such ‘as the trustees, after consulting with the actuary, decided to be just and equitable’. As such they consulted an actuary.

However, just prior to the transfer date the value of the fund was enhanced by a strong stock market rise taking the scheme from a deficit position to one of surplus, the result being that the scheme members sued the trustees for not taking this increase into account within the transfer payment. Defence costs alone were estimated to be approximately £2 million with several weeks in court, with the final costs being in the region of £5 million in total.

This case study was taken from the Pensions Ombudsman determinations. Under our Pension Trustee Liability insurance, defence costs and maladministration are normally covered, however each claim is reviewed individually in accordance with the specific policy wording.