A Melbourne-based insurtech provider will offer SMSF trustees liability insurance to cover them and their fund from the financial consequences of failure, disputes, fraud and regulatory actions.
Numerisk stated its SMSF Defender liability insurance policy, which is backed by Lloyds of London, will be available from 4 February and will extend protection to trustees, directors of corporate trustees, and spouses and legal representatives under specific conditions, and to an SMSF itself, ensuring its assets were also protected.
The firm added the new offering would address risks faced by SMSF trustee across four areas, with the first being personal liability and fund reimbursement, which provides cover for legal defence costs when trustees are accused of wrongful acts, including errors, omissions or breach of duty.
The second area is fines and penalties cover, which addresses regulatory penalties imposed by the ATO for unintentional breaches of SMSF rules.
The policy will also provide reimbursement of any professional accounting fees required to respond to ATO audits and investigations as part of its tax audit and investigation cover, while financial protection against scams, fraud and theft will be available via the crime and cyber-fraud cover.
The firm told selfmanagedsuper the new offering was not being offered directly to trustees, but rather through advisers who had access to the firm’s proprietary technology platform, and while no minimum fund balance would apply, cover would not be available for funds with balances over $5 million.
Numerisk chief executive Richard Silberman said the new insurance offering, in which typical annual premiums would range from around $1400 to $2700 depending on the level of cover, filled a gap in the market that had been highlighted by the recent failures of investments offered to the SMSF sector.
“The failures of the Shield Master Trust and First Guardian products in particular serve as stark reminders of market exposures for trustees and funds who also happen to be mums and dads and everyday people – something all industry stakeholders should keep front of mind,” Silberman said.
“Unlike retail and industry super funds, SMSF trustees bear personal responsibility for fund management and compliance.
“Previous insurance options have been limited, fragmented or cost prohibitive, leaving many trustees exposed to risks that could devastate their retirement savings.
“This isn’t just about protecting the fund, it’s about protecting the individuals who manage it.
“Trustees can face personal liability even when they’ve engaged professional advisers. SMSF Defender ensures they’re not left financially vulnerable.”
