I am acting as a trustee of a client’s trust, am I covered?
Yes, but subject to some limitations. A client, based on your trust practice, trusts you to be trustee of their trust. Before you trust that you have coverage from your trusted OBLIC LPL policy, make sure your actions as a trustee do not meet any of the exclusions from coverage.
There is a fair amount of policy language to digest when it comes to determining coverage for acts, errors, or omissions arising from services performed as a trustee for a client. I.COVERAGE, (c) provides the basic statement of coverage. “Acts, errors, or omissions by an Insured lawyer as [a] . . . trustee or in a similar fiduciary capacity, is deemed to be performance of ‘Professional Services.’”
However, the policy does not provide coverage for services as a trustee if the “Claim” arises:
- solely out of the Insured’s exercise of investment judgment;
- regarding any business enterprise or charitable organization if not appointed to such position by a court of competent jurisdiction;
- any pension, union, welfare, profit-sharing, mutual, investment fund and/or trust; or,
- any fund, trust, or other investment in which any one or more of the following have some beneficial interest: any Insured under this policy, or any spouse, parent, sibling, grandparent, grandchild, child, or any other relative of any Insured under this policy, including, but not limited to in-law, step, foster, adoptive or half relationships;
and except as otherwise excluded or limited by the other terms, conditions and exclusions of this policy. See I.COVERAGE, (c), pg. 2, (underline added).