Fiduciary Liability Policy

Are you interested in more complete protection for or your company’s fiduciary(ies) and your enterprise? We offer policies which enhance a basic ERISA bond with employee benefit liability coverage as well as other attractive features. Our enhanced policy provides:

  • Broader definition of “insured”
  • Civil penalty coverage
  • Coverage for “settlement” fees
  • Coverage for plans previous to corporate status changes
  • Broader definition of “subisdiary”
  • Coverage extension for a foreign parent corporation
  • Litigation defense option/duty to defend

Fiduciary liability insurance is designed to protect businesses’ and employers’ assets from “fiduciary-related” claims, generally due to the mismanagement of a company’s employee benefit plan(s). An administrator, TPA, trustee or plan sponsor is responsible for the legal expenses of defending against a claim and any financial losses that the plan may have sustained due to the errors, omissions or breach of  affirmative duty of one of these fiduciaries. Fiduciary liability policies do NOT cover “fraudulent acts” and therefore does not satisfy ERISA bond requirements. We offer a special ERISA-complaint coverage for registered investment advisers (RIAs). (hyperlink RIA to the app. for it.)

Per the International Risk Managment Institute, “Fiduciary liability arises from the obligations set forth in the Employee Retirement Income Security Act of 1974, also known as “ERISA”. The Act was passed to ensure that employees participating in an employee pension benefit plans and employee welfare benefit plans receive the benefits promised by those  plans. As a byproduct, the Act created a variety of fiduciary liability exposures for employers that offer benefit plans. Fiduciary liability insurance coverage was the industry’s solution to these new exposures.”

A typical fiduciary liability policy contains employee benefits liability protection, sometimes referred to as “employee benefits E&O”. The covered acts are those generally committed within the course of handling nondiscretionary functions associated with employee benefit programs. Again, defense coverage and “indemnifying the plan participants” are key.

If you would like a quote for this type of policy please complete and submit the application below.

As part of this Application, we expect you to submit the following documents:

  • Sponsor financial statement if applicant maintains a defined benefit, self-funded welfare plan, an Employee Stock Ownership Plan (ESOP) or if the applicant is a church, government or quasi-governmental entity
  • Plan financial statements for defined benefit plans and self insured welfare plans, if limit requested is greater than $1,000,000
  • Sponsor financial statement and plan financial statements for each defined contribution plan, if limit requested is greater than $5,000,000
  • Employer Securities Supplemental Application, if any plan is an ESOP or if any other defined contribution plan invests in employer securities