Protect Your Personal Assets from a Fiduciary Claim
If you are involved in the management of a retirement or health plan for your company, then you are considered a fiduciary. As a fiduciary, it’s your responsibility to select advisors and investments, minimize expenses, and follow plan documents.
Under the Employee Retirement Income Security Act (ERISA), fiduciaries can be held personally liable for losses to a benefit plan resulting from an alleged error, omission, or breach of duty.
Most directors and officers liability policies specifically exclude ERISA claims. With the average cost of a fiduciary case at about $1.2 million, fiduciary liability insurance is a must have for all businesses.
Fiduciary liability provides financial protection against administrative errors and omissions, as well as personal liability for a breach of duty in connection with an employee plan. This coverage also includes defense costs for such claims.
In addition to fiduciary liability, there are two other types of coverage:
- ERISA bond: Required by law, provides first-party coverage that pays the plan for any loss from theft of plan assets.
- Employee Benefits Liability (EBL) insurance: Provides coverage for employee benefit plan claims, but is restricted to administrative errors and omissions (handling records, enrolling, terminating, or cancelling employees, interpreting plan benefits).