Pension trustee liability insurance

Pension issues have consistently made headlines over the past few years and continue to influence corporate activity. Existing and future legislation together with recent court judgements and Pension Ombudsman recommendations have reiterated the need for effective risk management in this field.

Of primary concern is the risk that individual pension trustees could find themselves personally liable from a range of allegations, putting their own assets in jeopardy. The liabilities that can flow from these duties attach not only whilst trustees serve, but also at the point where the scheme members make a claim – commonly on retirement or exit.

This creates very long-term (if not lifetime) exposure and structuring appropriate insurances can mitigate the burden on trustees. JLT’s pension liability experts advise our clients actively on the exposures and issues in this field, providing timely and appropriate guidance.


Pension Trustee liability

Trustees are subject to strict scrutiny and accountability. As such, unlimited personal liability can be brought for: failure to fulfil statutory obligations, failure to comply with legal requirements, negligence, breach of duty, breach of trust, administrative errors, wrongful omission or misleading statements.

Whether the wrongful act is actual or alleged, the costs involved in investigation and defending the case can be huge, regardless of any damages awarded.

Pension Trustee liability

Pension trustee liability insurance provides external and independent protection against these allegations. It can cover the assets of individual trustees, the pension scheme itself and the employer running the scheme.

Above all it provides peace of mind so that trustees and employers have the confidence to perform their roles knowing that the relevant protection is in place. As one of the largest insurance broking houses in the world, JLT can achieve broad policy wordings covering your risk exposures.


Any of the plan stakeholders, including: ex trustees, pensioners, deferred members, owners, investors, lenders, employees and securities holders, consumer groups, and government enforcement/regulatory groups.

The policy covers a broad range of allegations including: breach of trust, breach of duty, breach of statutory provision, maladministration, negligence, administration errors, wrongful omissions and misstatements or misleading statements.

Yes, investigation costs are contained within the definition of defence costs.

Yes, but it is not always desirable to have multiple firms involved in the defence. Defence costs erode the limit of liability so it is preferable to limit the number of firms unless conflicts exist between the individuals. Also by using one firm, a more united front is demonstrated to the claimant, offering a strategic advantage.

A notice of circumstance is not a claim, but rather a potential claim which is usually defined as circumstances that might give rise to a claim in the future.

Courts have in the past upheld the claims-reporting requirements, finding the requirements to be a condition of coverage. This policy requires notice as soon as practicable – carriers and courts differ on what length of time is practicable. In any event, failure to provide timely notice can result in loss of coverage. What would be a covered claim can become uncovered if the reporting provisions of the policy are not strictly adhered to.

A policy may not be cancelled typically except for non-payment of the premium

The definition of a pension trustee includes any natural person who ‘was, now is or shall be’ a pension trustee or administrator of the plan” therefore old and new trustees will automatically be covered for actions whilst they served in that position.


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Pension Trustee liability

Working with JLT you would receive advice from a pension trustee liability expert:

  • sharing best practices and providing you with a better understanding of your risk exposure
  • with a single-minded commitment to cost management and claims performance
  • a practical problem solving approach, proven in resolving common issues

Pension Trustee liability

  • who will build the service delivery around your business needs
  • providing you the confidence and trust that you will always get the best results possible
  • treating you as a partner at all times
  • offering an integrated team that offers the depth of expertise, service and resource that your business needs.

Insurance solution

We can achieve broad policy wording including (but not limited to) coverage for:

  • Defence costs, legal representation expenses and judgement settlements
  • Damages including distress awards and compensation
  • Loss to the sponsoring employer or pension scheme
  • Acts committed prior to the inception of the policy
  • Public relations expenses
  • Civil fines and penalties (where insurable)
  • Court attendance and staff disruption costs

Furthermore the policy can be tailored to meet the specific needs of each individual client, taking into consideration:

  • Number of schemes
  • Defined benefit of defined contribution
  • The funding/deficit position of a scheme
  • Changes in pension legislation/regulation
  • Fund performance
  • Geographical exposure
  • Loss history.
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