A helpful insurance and risk management guide for professionals and private individuals acting as Executors or Administrators. You will learn about:
This guide to executors insurance will help you understand your risks and the insurance products available to protect you, other executors, personal representatives and beneficiaries.
You will learn what insurance policies to:
Review and arrange immediately
Consider when you have received the grant of probate; and
Consider when you are ready to distribute the estate.
You can click on any of the items in 'Contents' to jump to the section that interests you. Each section will also link to further information on each product.
If you have further questions on executor insurance, start a chat or contact us.
This page will help you understand your potential liabilities if you act as an executor or administrator.
Sometimes, legal firms will use different terms for these roles, as explained below:
An Executor is a person named in a will to carry out the deceased's wishes.
An administrator is appointed by the court to administer an estate. This happens when there is no will or the executor named in the will is unable or unwilling to serve the estate. An administrator is sometimes referred to as a personal representative.
From this point on, we will use the word ‘Executor’ to describe these functions.
You need to know that your role of executor continues for life:
So you must take the time to review the various types of executors insurance available to protect you, any other personal representatives and the beneficiaries.
The potential liabilities you face include:
Liability for mistakes.
Executors can be held liable for any mistakes in carrying out their duties. This could include:
Incorrectly calculating the value of the estate, including assets, investment, and property.
Paying incorrect taxes to the HMRC.
Failing to pay any outstanding debts and final bills.
Failing to distribute the estate correctly to the beneficiaries.
Failing to insure any property correctly
Liability for inheritance tax.
Getting this right is crucial. If you underpay, you may be liable to pay the difference to the HMRC. You are also personally liable if you overpay or incur penalties for late payment. This usually entails reimbursing any beneficiaries who are out of pocket as a result.
Liability for claims against the estate.
If someone claims against the estate, in the absence of insurance, the executor may be personally liable for:
defending the claim and paying the legal fees
paying any award
paying any out-of-pocket expenses
This is why you need to exercise your role with care. Your actions could have legal and financial consequences for you and others, including:
Other executors or administrators involved in the estate;
The beneficiaries
Equally, the actions of other executors could also expose you.
You could appoint a legal professional to help guide you. They can take on the responsibility of ensuring some of this is done correctly. Such as correctly distributing the estate and paying any inheritance tax.
It is common for lay executors to work with a professional to administer the estate. If this is the case, you still need to remain cautious. This is because each executor is jointly responsible for mistakes made by another.
This is why arranging suitable executor insurance can be a sensible move. It will not only protect the executors but also the beneficiaries. The last thing any executor wants is for beneficiaries to pay back some or all of their inheritance.
Executors should consider the following insurance types:
Unoccupied Probate Property Insurance. Property is usually unoccupied during probate. Insuristic has developed a specialist insurance product for this scenario.
Insurance for property occupied during probate. Property in probate is sometimes occupied by people living there with the permission of the executors. This is becoming more common, and finding an insurance provider to cover it can be challenging. Insuristic has developed a home insurance product where property can be insured in the estate's name.
Land Insurance - If the deceased owned plots of land that aren't contained in their home deeds, this should be considered. A landowner has a duty of care to protect visitors (there legally or otherwise) from injury. Land Insurance can protect the estate's liability to third parties who have been injured or suffered property damage on the land.
Section 27 Indemnity Insurance. You might have already placed a section 27 notice. A Section 27 notice is a legal document that is placed in The Gazette and local papers to inform creditors and beneficiaries of the death of an individual and the intention to distribute the estate. It is required under Section 27 of the Trustee Act 1925 and helps protect the estate's executors from claims that may be made against them by creditors or beneficiaries who were not aware of the death. If you would like to find out more about Section 27 notices, you can visit the Gazettes web page.
However, a Section 27 Notice does not protect the beneficiaries from creditors' claims. A Section 27 Insurance policy protects both executors and beneficiaries from creditors' claims.
Early distribution insurance. Provides cover if the estate is distributed during the statutory 6-month period. It protects against claims made by unknown dependants who feel that the estate has unfairly excluded them. This can result in a claim, which, without insurance, can impose liabilities on the executors and beneficiaries.
Missing Beneficiary Insurance. Covers claims from beneficiaries who were unknown or missing at the time of the estate's distribution.
Missing Will Insurance covers claims from people claiming another, newer will should have been used as the basis for distributing the estate.
These executor insurance covers provide peace of mind for all the executors, personal representatives, and beneficiaries. The cost can be reclaimed from the estate at the point it is distributed.
In addition, executors can buy a range of Asset Searches to help reduce their risks and streamline the estate administration process.
Below, you can find out more about these executor insurance covers and Asset Searches, as well as in what order they should be considered.
If you are acting as an executor, the first question you may have is how much is all this going to cost and who is paying for it?
The answers to these questions may become a little more urgent if the estate is asset-rich but cash-poor.
Executors can incur a lot of expenses during probate. These expenses are often paid out of their funds or the funds of the beneficiaries.
These expenses can come from arranging insurance, appointing legal providers, paying property managers, valuing the estate, selling property, paying utility bills and more.
The costs of administering an estate can add up quickly. Even though expenses can be reclaimed once the estate has been distributed, this can take 12-18 months or more.
But there is another way. If you are working with a professional, ask them if they are using Insuristic Estate Finance.
Insuristic Estate Protect is a low-interest drawdown facility backed by FSL Finance. It has a pre-agreed limit of £15,000 and a minimum drawdown of £495:
It is only available for professional firms that use Probate Pro.
The cost of the funding is low at 1.5% per month.
There is nothing to pay until the estate is distributed.
The cost is repaid as an estate expense when the estate is distributed.
This may help you arrange better insurance and legal services to fully protect the estate, executors and beneficiaries, without the worry of the cost.
It is your responsibility as the executor or administrator to ensure the property and any land owned by the deceased is insured properly.
So as a first step you should review the insurance for any:
Unoccupied Property;
Occupied Property; and
Land Insurance
Read on to find out more.
It is the responsibility of the executors to arrange suitable probate property insurance. In the event of a loss, failure to do so could result in the executors becoming legally liable to put things right.
Imagine if there was a major incident at the property that wasn’t insured correctly, such as a fire or flood.
This could result in a significant financial liability for the executors. Particularly as the beneficiaries will seek to be reimbursed for any uninsured losses.
You shouldn't rely on the deceased's insurance either (if the policy is still current). The policy will likely have been arranged for an occupied property and may not be appropriate.
Here are some common issues when relying on the existing insurance:
The property needs to be arranged in the name of the estate. This ensures the proceeds of a claim have somewhere to go i.e. the estate. The property should not be insured in the name of the executor or beneficiaries. The insured name should be 'The Executors of Name of Deceased' if there is a will. If there isn't a will, the insured name should the 'The Administrators of Name of Deceased'.
Many insurers are reluctant to insure property that is continuously unoccupied. This is usually 30 days although some insurers might provide unoccupied cover for 60 days. When the property becomes unoccupied you need to notify the insurer immediately. If the insurer agrees to provide cover and update the insured name, you will likely have new policy conditions to consider:
The existing insurer may restrict cover with new policy conditions. Common conditions involve restricting escape of water cover, improving security or increased excesses.
The unoccupied property will need to be inspected. You may also need to arrange for the property to be inspected every 7 days. Some insurers might extend this to 14 days.
What if the property is underinsured? This can leave the executors with a financial liability in the event of a claim. More on that later.
The policy conditions need to be fully understood by all executors.
Remember, all executors are liable for mistakes made by another. So one executor failing to comply with a policy condition can create a liability for all.
Imagine that the property has had its water systems drained down. But one executor refills the system to put the heating on whilst visiting the property. If there is now an escape of water claim that isn't insured, all executors would have to foot the bill.
You can get a quote on our unoccupied probate property insurance page
When you are arranging insurance for property during probate you need to be careful not to underinsure it. If you provide the wrong rebuild cost during the quotation you could be in for a shock when it comes to a claim.
The impact of underinsurance could be:
that an insurer declines to pay a claim if the property is significantly underinsured; or
they reduce the claim by the amount of underinsurance.
The beneficiaries blame the executors for failing to arrange the correct insurance on the property. This could mean they ask the executors to refund any loss as a result of the underinsurance. This could be significant if you imagine a property with a rebuild of £500,000 but was insured for a market value of £400,000. The shortfall would be £100,000.
If you want to find out more, check out Insuristic's article for Today's Wills and Probate Magazine: The risk of building underinsurance for executors.
If the property has 4 bedrooms or less and a rebuild value below £750,000, we work out the rebuild cost for you behind the scenes.
The policy you buy then has £750,000 building sums insured as standard, meaning you don’t need to worry about underinsurance, providing you are confident your property rebuild valuation is below this figure. If you are unsure whether it is or not, we would recommend completing a rebuild cost assessment to be on the safe side.
If the property is likely to exceed a £750,000 rebuild valuation, you can speak to our underwriting team directly at SJL Insurance. They will be able to provide advice, tell you how to get a valuation and then provide insurance based on a true rebuild cost.
Alternatively, you could arrange a rebuild valuation yourself. BCH are a specialist in building insurance valuations and has offered a discounted price for Insuristic customers. You can arrange a building rebuild valuation for £100+ VAT on the BCH website.
But don’t worry if this all seems daunting.
Insuristic is a specialist in Probate Insurance. We have developed a product specifically designed for insuring unoccupied property in probate. We can cover unoccupied houses, flats or maisonettes.
You will find our policy conditions easy to understand and well-explained on our probate house insurance page.
The policy is easy to arrange online in a couple of minutes.
There is no compulsory requirement to drain down water systems on our Gold and Silver policies. We just cap the value of escape of water claims where this hasn't been done.
Our policyholders only need to inspect probate property every 30 days. There are no written reports to complete. Inspections can be evidenced by two pictures taken with a mobile device, one of the outside and one of the inside of the property. Inspections can be done by anyone. The pictures only need to be shown to the insurer in the event of a claim.
Properties aren’t always empty during probate. Sometimes property is occupied by dependents, beneficiaries or tenants of the deceased.
Whilst this may sound reasonable, it may cause problems for your insurance:
The property still needs to be insured in the name of the estate until it is distributed. The property can't be insured in the name of the people living there as they have no financial interest in it. If there is a claim, the proceeds need to go to the Estate.
Insurable interest won't be clear to the insurer. If the property is occupied the estate is effectively acting as a landlord. Which means a standard home insurer may struggle to insure the property;
Landlords' insurance policies require a tenancy agreement to be in force. This is unlikely if the property is occupied by the dependents or beneficiaries. Without a tenancy agreement, the landlord's policy will be invalid
Many providers of probate insurance only cover unoccupied property. These policies are often not suitable for occupied properties.
These are issues for executors when arranging probate insurance for occupied property.
But don’t worry, Insuristic can arrange a home insurance product that:
You can insure in the name of the estate; and
Provides cover whilst it is occupied. The occupants will need to be living there with the permission of the executors;
If the deceased owned land, such as a private road, development sites, grazing land, moorland etc., there is a liability exposure for the executors.
If someone accidentally injures themselves or damages their property on the land, they could claim damages against the estate.
The claimant could be on the land with permission or trespassing.
The land should also be insured in the name of the estate.
To buy online in a couple of minutes, check out our landowner's liability insurance page. The land can also be insured in the name of the estate.
In the interim, our broking team at SJL Insurance can provide you with a quote over the phone. Please send us a message via our Contact Us page and we will be in touch.
If you are acting as the executor, administrator or personal representative there are several Asset Searches for you to consider. These searches will help protect your risks and those of the other administrators and beneficiaries.
These searches are also often recommended to support the insurance application process.
All of these asset searches can purchased by lay executors (private individuals) or professionals alike.
Read on to find out more.
In the aftermath of a loved one's passing, the handling of their estate often falls upon executors, who are tasked with ensuring the deceased's final wishes are carried out as intended.
A crucial step in this process is conducting a Certainty Will Search, a comprehensive procedure that helps locate any existing Wills, including those that may not be registered.
Professional Executors or Administrators, Deputies or Attorneys are duty-bound to identify and settle any estate debts and liabilities.
If the deceased has any liabilities that are not clear at the time of passing, any creditors can claim payment from the Legal Representative or funds paid to beneficiaries.
Executors need to locate all the assets due to an estate and must be able to demonstrate that they have conducted a thorough search of where assets may have been held by the deceased.
There are various ways to search for all assets that are due (some for free) to an estate to give Executors and Administrations peace of mind whilst fulfilling their professional duty.
If the estate is large or complex, a professional probate genealogist can help significantly. They can help you trace missing beneficiaries or next of kin, help you fill in the blanks and also help solve complex inheritance questions.
Section 27 of the Trustees Act 1925 gives the right to the trustees, executors and personal representatives to safeguard themselves from any claims or liabilities while distributing or conveying a questionable property.
They can do so by publishing the Section 27 Notice in the Gazette and local newspapers as per the specifications mentioned in the section.
When you have received the Grant of Probate or Letters of Administration (if there isn't a Will) you may want to consider the following insurance policies:
Read on to find out more.
Early distribution insurance is an important executor insurance cover. It protects executors and beneficiaries from claims by known dependants that fall under the Inheritance Act 1975.
The Act allows people to make a claim against an estate if they feel they have been unfairly excluded when the estate is distributed.
Executors usually have to wait 6 months after the Grant of Probate is issued before they can distribute the estate. This is to provide enough time for claimants to come forward. This is a requirement under the Act also.
However, it is not always possible to wait this long. Particularly if the beneficiaries need access to their inheritance quickly. Or perhaps there are bills the estate needs to pay.
Early distribution insurance can help in this scenario. Executors can distribute the estate with insurance during the 6-month waiting period. If any unknown dependants come forward this insurance policy protects the executors and beneficiaries from any liability.
Another type of executor insurance policy that should be considered when you have received the Grant of Probate is Section 27 Insurance. It provides insurance against unknown creditors making a claim against the estate after distribution.
Executors are encouraged to place a section 27 notice to protect their liability should an unknown creditor come forward. However, in the absence of insurance, this does not protect beneficiaries.
It is also possible that the executors did not place a Section 27 notice.
A Section 27 Insurance policy protects the executors, personal representatives and beneficiaries against claims from unknown creditors.
As the cover starts from £89.60 including Insurance Premium Tax it can be a wise purchase. The price will vary depending on the size of the estate but can provide valuable peace of mind to executors or administrators.
When the estate is ready to be distributed you should consider the risks associated with a newer will being found after the estate has been distributed. You may also want to consider protecting against the risk of a known or missing beneficiary coming forward in the future to claim against the estate.
Read on to learn about the insurance you can buy to protect against this.
Insurance can be purchased to protect against the risk of a newer Will being discovered in the future.
It is a risk that a newer will is found that changes how the estate should have been distributed. This could result in significant legal costs for the executors. It is also possible that the previous beneficiaries aren't in the newer will or are listed as receiving a lower amount. This could mean that all or part of the inheritance needs to be repaid.
A missing will insurance policy protects the personal liability of the executor, personal representatives and the beneficiaries. It also protects the other beneficiaries so they won't need to repay all or part of their inheritance.
Any successful claimants will be reimbursed by the policy, which will also cover any associated legal costs.
Protecting against the risk of a missing beneficiary claiming the estate is another important consideration when arranging executor insurance.
Missing beneficiary insurance protects executors and beneficiaries if:
A known beneficiary can't be contacted at the time of distribution and later comes forward to claim against the estate.
An unknown beneficiary claims against the estate after it is distributed.
The policy protects the personal liability of the executor and the beneficiaries. The policy compensates the missing beneficiary and covers any legal costs. This means that other beneficiaries won't need to repay part of their inheritance.
Your insurer will need to see sight of a genealogy report produced by a professional genealogist as part of the quotation process. You can find out more or contact a genealogist via our probate genealogy page.
This depends on the type of insurance you are arranging.
If you buy an estate administration insurance product such as missing will, missing beneficiary, section 27 or early distribution insurance then these policies will last for 10 years.
If you are insuring property or land, the cover will last for as long as the policy you have arranged. These can be annual or short term insurance polices.
In England and Wales, the person who is responsible for administering the estate of a deceased person is called an executor if there is a will, or an administrator if there is no will.
Executor
An executor is a person named in the will of the deceased person. They are responsible for carrying out the instructions in the will, such as paying the deceased's debts, distributing their assets to the beneficiaries, and filing the necessary paperwork with the court.
To become an executor, they must apply for a grant of probate from the court. This grant gives them the legal authority to act on behalf of the deceased person's estate.
Administrator
An administrator is a person appointed by the court to administer the estate of a deceased person if there is no will. They have the same responsibilities as an executor, but they do not have the same authority.
To be appointed as an administrator, the person must be able to show that they are the deceased person's next of kin.
As an Executors or administrator, you have a lot of responsibility when it comes to managing the estate of a deceased person. You are responsible for paying debts, distributing assets, and filing paperwork. This can be a complex and time-consuming process, and there is always the risk of making a mistake.
The various executor insurance policies can help protect you and other executors liability if you make a mistake.
Here are some of the situations where executor insurance may be helpful:
If you are appointed as an executor or administrator and you want to protect yourself against any financial losses as a result of a mistake
If the estate is complex and there is a risk of making a mistake.
Insurance you should consider immediately:
Insurance for property or land
Insurance to consider once the Grant of Probate has been received:
Early Distribution Insurance: If the estate needs to be distributed before the 6-month waiting period ends, you can buy insurance to protect you and the beneficiaries.
Section 27 Insurance: If you are worried about any unknown creditors who may challenge the distribution of the estate.
Insurance to consider when you are ready to distribute the estate:
Missing Beneficiary Insurance: Provides protection if an unknown beneficiary makes a claim against the estate after it is distributed. It is also useful cover if a known beneficiary cannot be contacted but the estate needs to be distributed.
Missing Will Insurance: If a newer will is found after the estate is distributed the costs of the legal challenge and any redistribution can be expensive. Plus the beneficiaries might have to repay the money they have received. This risk can be insured against through a missing will insurance policy.
The answer to this depends on the type of policy you have purchased.
If you are insuring unoccupied property in probate, you have three levels of cover you can choose from. Check out our Probate Property Insurance page for more info.
If you have purchased any of the executors indemnity insurance policies, these will cover you for:
Any amount within the terms of the policy that the executors, personal representatives and/or beneficiaries have to repay.
Any associated legal costs and expenses.
You can find out more about each policy below:
There may be an number of exclusions on executors indemnity insurance which vary by policy type.
However the most common exclusion relates to matters that were known about before the distribution of the estate. If there are issues that are known about or suspected, these should be disclosed in your quotation request. If they are not, they will be excluded.
However, if you do know about known issues, it is possible to obtain a quotation upon disclosure to the underwriters. Our insurance partner, CLS have underwritten many complex cases and may still be able to provide the peace of mind you and the beneficiaries need.
To find out more about the cover and what is or isn't included visit:
Any executor insurance usually needs to be paid upfront but the money paid can be reclaimed from the estate when it is distributed.
An Executor bank account can be set up using the estate’s funds so that you do not have to pay any upfront fees yourself. However, this can depend on the amount of money in the estate and which financial institution the deceased banked with, and you may need the Grant of Probate before receiving any estate expenses from the deceased’s funds.
Before you do anything, you should refer to your policy document for instructions on how to make a claim.
If you need advice on a potential or existing claim, you should speak to the claims team at CLS Property Insight on 01732 753 910.
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Please Note: Our broking team at SJL Insurance will need to talk to you to discuss your requirements. This is an advised service.
Please Note: Our broking team at SJL Insurance will need to talk to you to discuss your requirements. This is an advised service.
Please Note: Our broking team at SJL Insurance will need to talk to you to discuss your requirements. This is an advised service.
Please Note: Our broking team at SJL Insurance will need to talk to you to discuss your requirements. This is an advised service.
Please Note: Our broking team at SJL Insurance will need to talk to you to discuss your requirements. This is an advised service.
Please Note: Our broking team at SJL Insurance will need to talk to you to discuss your requirements. This is an advised service.
Please Note: Our broking team at SJL Insurance will need to talk to you to discuss your requirements. This is an advised service.