Fiduciary Liability Insurance for Those Who Manage Employee Benefit Plans.
If you manage or administer an employee benefit plan — a 401(k), pension, health plan, or similar program — you have a fiduciary duty to plan participants. Fiduciary liability insurance is generally designed to help protect plan administrators and trustees from claims that they failed to fulfill that duty. Saint Moore Insurance Agency helps organizations find the right fiduciary coverage for their benefit plan responsibilities.
What Is Fiduciary Liability Insurance?
Fiduciary liability insurance is a type of management liability coverage designed to protect individuals and organizations that manage employee benefit plans — such as 401(k) plans, pension plans, health and welfare plans, and other ERISA-governed programs. Under ERISA (the Employee Retirement Income Security Act), plan administrators, trustees, and anyone who exercises discretionary control over a plan are considered fiduciaries and can be held personally liable if they breach their fiduciary duties to plan participants.
Claims against fiduciaries can arise from allegations of imprudent investment decisions, failure to diversify plan assets, failure to follow the plan document, conflicts of interest, errors in plan administration, or failure to properly communicate plan information to participants. These claims can be brought by plan participants, the Department of Labor, or other government agencies. ERISA insurance — another name for fiduciary liability coverage — is generally designed to help cover the legal defense costs and any settlements or judgments that result.
Fiduciary liability insurance is distinct from an ERISA fidelity bond, which is a separate and federally required bond that protects the plan against losses caused by employee dishonesty or fraud. Both are often needed by organizations that sponsor benefit plans. If your organization sponsors or administers an employee benefit plan, contact a Saint Moore Insurance Agency agent to understand your fiduciary exposure and explore your coverage options.
