What Does Prudent Man Rule Mean?

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What does Prudent Man Rule mean? Read on to discover the definition & meaning of the term Prudent Man Rule - to help you better understand the language used in insurance policies.

Prudent Man Rule

Prudent Man Rule

The Prudent Man Rule mandates that trustees are obligated to manage investments in the same way that a prudent person would manage their own affairs, using discretion and intelligence. This does not apply to speculation but only to the permanent disposition of funds, taking into account their probable earnings and the safety of the capital to be invested.

We hope the you have a better understanding of the meaning of Prudent Man Rule.

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