Chubb to protect pension trustees

Chubb Insurance has launched a new pension scheme and benefit plan liability policy in response to the increasing obligations being placed on trustees and the rising risks they face.

Trustees play a vital role in pension schemes and, although many are volunteers, they are required to act in an increasingly professional manner.

The obligations placed upon them by pensions law and other legislation are onerous. The law requires trustees to be familiar with all relevant scheme documentation. In addition the day to day administration of pension schemes is complex and detailed. Trustees need to be familiar with a very large amount of documentation, law and best practice.

Nigel Pearson, UK underwriting manager for executive protection at Chubb Insurance, said: “The Pensions Regulator can issue a contribution notice to the trustees and managers of a scheme as well as the employer, if it believes they were party to an act or deliberate failure to act which results in the under-funding of a scheme.

"Chubb’s new Pensions Liability Insurance was designed with these risks in mind.

"Trustees have an essential role to play in the running of pension schemes and our new policy ensures protection for the increasing risks they face in doing this important job.”

Chubb’s new policy provides a broad definition of insured persons, and covers the insured persons for contribution notices, missing beneficiary claims and stakeholder pension scheme obligations.

The policy can never be avoided or rescinded for misrepresentation or non-disclosure (not even if it is fraudulent), cover limitations are only for those individuals who knew of the non-disclosed or misrepresented facts and for organisations where particular persons knew. The policy also covers compensation to the policyholder for court attendance and staff disruption costs.

Terry FitzGerald, senior underwriter at Chubb Insurance, adds: “In today’s uncertain economic environment, the risks that trustees face have undoubtedly increased. Trustees must recognise that their obligations are personal and can attract personal liability. In such an increasingly complex environment it has never been more important for the prudent trustee to have the peace of mind that insurance can provide.”