Why you need fiduciary liability insurance
As benefit plans become more complex due to healthcare and pension reforms and market and exchange disruptions, employers encounter a difficult landscape that can create both business and personal liability. Employers and leadership can be sued by plan participants, the Department of Labor and the Pension Benefit Guarantee Corporation with combined defense and settlement costs exceeding $1 million.
Employers offering benefits are considered “fiduciaries,” and many leaders can be held personally liable when managing these plans, putting personal assets such as family and college savings and homes at risk.
What’s typically covered
Fiduciary insurance, which is not covered by director’s and officer’s liability policies, provides financial protection for fiduciaries. It covers defense costs and settlements for claims of benefit-plan losses, including:
• Bad insurer, mutual fund or third-party administrator’s choices
• Plan administration errors or conflict of interest
• Benefits denial, changes or reductions
• Bad advice or improper counsel
• Funding a plan insufficiently or failing to diversify
• Choosing poor investments or squandering assets
• Terminating a plan incorrectly
Contact a INSKING broker to get started.