eSpecialty can offer Errors and Omissions coverage to help trustees manage their risk

Trustee E&O

Trustee E&O insurance is a specialty errors and omissions (E&O) coverage that provides professional liability protection for trustees and for some trust service providers, such as conservators and receivers. Trustees and trust service providers agree to manage the trust in accordance with the terms of the trust document and in compliance with the law on behalf of the trust’s beneficiary. Within these guidelines, trustees will inevitably need to exercise discretion and subjectivity in decision making, which can subject the trustee to scrutiny by stakeholders. Additionally in his/her role, a trustee called upon to perform a variety of duties including:

  • Investment strategy & planning

  • Asset allocation and divestiture

  • Investment advisor selection and review

  • Charitable giving

  • Property management

  • Insurance management

  • Tax - preparation and filing, planning, compliance

  • Administration - reporting, record keeping, estate planning, paying expenses

Due to the broad scope of responsibilities, trustees find themselves subject to a wide range of exposures including failure to diversify, accounting errors, asset mismanagement, unfair or improper distributions, conflict of interest, and failure to follow terms of the trust agreement. Many times simply the presence of an allegation can trigger losses and expensive legal costs.

Do I need Trustee E&O insurance??

Trustees, guardians of the estate (conservators), receivers, and others who have legal duty to act in good faith to manage assets on behalf of beneficiaries should consider trustee E&O insurance. Trustee E&O policies can cover a variety of trust types including:


  • Revocable living trusts

  • Irrevocable trusts

  • Testamentary trusts

  • Charitable trusts

  • Receivership trusts

  • Liquidating trusts

  • Non-liquid asset trusts

  • Special needs trusts

  • Multiple trusts

  • Guardianship agreements

  • Conservatorship agreements

Why is it needed? Trustees can be held legally accountable for their decisions by creditors, beneficiaries, charities, and others while acting as the administrator of a trust. Unlike many professionals covered by professional service organizations, trustees may be exposed to substantial personal liability, with personal assets at risk. Even accountants, attorneys, and other trust service providers acting as trustees are often not covered by their existing professional liability policies for their role as trustee.


Family trusts, created to provide long-lasting financial benefits for current and future generations, are often complex structures as they seek to balance a variety of objectives, including allocating and protecting assets, maintaining control of assets, and minimizing taxes. In addition, the familial nature of trusts can heighten emotions and even stoke rivalries. This combination of complexity and emotion provides fertile ground for differences of opinion between trustees and beneficiaries, the primary source of claims. Balancing the rights between generations can be particularly tricky, and decisions that may benefit one generation can trigger claims from subsequent generation beneficiaries.

Additionally, trusts vary widely in size and objective, as well as in asset types held. While many hold traditional assets like stocks and bonds, many trusts contain illiquid, hard-to-value assets, such as private company equity or real estate. The way in which these assets are managed can have significant impact on the cash flow and distributions to the beneficiaries, and thus can create possible liability for the trustees. Examples of claims against trustees include:

  • Conflict of interest

  • Mismanagement or non-management of trust assets

  • Violation of trust or corporate purpose, exceeding authority

  • Breach of fiduciary duty

  • Misrepresentation

  • Intentional wrongful conduct

  • Professional negligence

  • Challenges to the terms of the trust

  • Negligent supervision and selection

Allegations, even if ultimately defensible, are increasing in frequency and often require litigation. While in some cases trust documents provide for indemnification of the trustee, this structure exposes trust assets to the cost of litigation. In turn, exposing trust assets to cost of litigation can even cause further loss as it opens the door to a negligence claim for the trustee failing to purchase insurance.  In some cases there is no way out without adequate protection. Trustee E&O serves to ensure the availability of alternative funding to defend action and damages.

What is Covered?

What is NOT Covered?

It depends. As trustee E&O is a specialized type of insurance, coverage can vary widely based on the insurer, the size and type of trust, and the trust structure.


Standard limits for most small to medium entities begin at $1.0 million, though the most basic forms only protect the trustee for his/her administration of a specific trust or group of trusts.


Most policies contain standard professional liability exclusions like discrimination, wrongful profit and dishonesty. While often excluded from basic policies, securities coverage and D&O coverage for trust-owned operating companies may be added if custom coverage is requested.

Because this coverage is a form of professional liability insurance, it is always provided on a claims-made basis.

Trusts may require other types of insurance, as trustee E&O insurance primarily protects the trustee from claims related to management of individual trusts.


Examples of supplemental coverage often sought by trusts include:

  • Fiduciary liability insurance

  • Investment advisor professional liability insurance

  • Cyber insurance

  • Employment practices liability insurance

  • D&O coverage for subsidiaries or non-profit affiliates

Confusingly, trustee E&O insurance is not the same as fiduciary liability insurance, even though a trustee is considered a fiduciary.


Fiduciary liability insurance provides coverage for the management of employee benefit and pension plans.

What does it cost?


Trustee E&O insurance costs can vary greatly, which is why it is important to work with experts who understand your specific needs and challenges. Factors impacting the cost of trustee E&O include:


  • Type of trust

  • Structure of trustee services

  • Total value of assets managed

Often this cost is provisioned for in trust agreements that allow the trust to pay for appropriate insurance coverages, including trustee liability.

How to get it?


To apply for trustee E&O coverage, an applicant will generally need to answer the following questions for underwriting:

  • Who are trustees?

  • What is the value of the trust?

  • What assets are in the trust?

  • Who are the beneficiaries?

  • What is the trust structure?

  • How is the trust managed?

The eSpecialty team has expertise in professional liability for trusts and trustees, and we provide E&O insurance for all types of trustee situations across a broad range of asset classes.


We would love to assist you with your trustee E&O needs, and look forward to providing you with streamlined service, competitive pricing and coverage options from a variety of insurance partners.


For more information on trustee professional liability (E&O) or to discuss your specific coverage need, please email ( We look forward to working with you!

If you are interested, fill out the form below and we will contact you about a Trustee E&O quote.

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