Key Benefits of Fiduciary Liability Insurance:
Protection for Fiduciaries: Fiduciary liability insurance protects individuals who are responsible for managing employee benefit plans. Whether you are a director, officer, trustee, or other fiduciary, this insurance shields you from personal liability resulting from breaches of your fiduciary duties.
Coverage for Plan Management Errors: Fiduciaries are required to act in the best interest of plan participants, adhering to all relevant laws and regulations. If a fiduciary is accused of mismanagement, errors in the administration of benefits, or failure to follow the plan’s guidelines, fiduciary liability insurance provides coverage for legal defense costs, settlements, and any damages that arise from such claims.
Legal Defense Coverage: Fiduciary liability claims can be expensive to defend, even if they are ultimately unfounded. This insurance covers the costs associated with defending against claims of breach of fiduciary duty, including legal fees, court costs, and settlements. It helps ensure that fiduciaries are not personally financially burdened by these costs.
Coverage for Breach of Fiduciary Duty: Fiduciaries are required to make decisions in the best interest of plan participants, including avoiding conflicts of interest and acting with prudence. If a fiduciary is accused of breaching these duties—such as making improper investment choices or failing to diversify a plan's assets—this coverage helps protect against the financial consequences.
Protection Against ERISA Violations: The Employee Retirement Income Security Act (ERISA) sets strict standards for fiduciaries managing retirement plans. Fiduciary liability insurance covers claims arising from violations of ERISA, helping protect fiduciaries against penalties or claims for non-compliance.
Coverage for Employee Benefit Plan Failures: Fiduciaries can be held liable for failing to properly manage or administer employee benefit plans. If an error or oversight occurs in the handling of a health insurance plan, retirement plan, or other employee benefits, fiduciary liability insurance can help cover the costs of the resulting claims.
Reputation Protection: Fiduciary liability insurance not only covers financial costs but can also help protect the reputation of the business and the individuals involved. Legal actions related to fiduciary responsibilities can harm the trust placed in the organization by its employees, stakeholders, and clients. Having this coverage in place can help manage the fallout and ensure a quicker recovery.
Why Your Business Needs Fiduciary Liability Insurance:
Increasing Risk of Lawsuits: With a growing number of claims related to breaches of fiduciary duty and mismanagement of employee benefit plans, businesses are exposed to greater liability risks. Fiduciary liability insurance is essential in managing these risks and ensuring that those who manage employee benefits are protected.
Protection Against Personal Liability: Without fiduciary liability insurance, individuals responsible for managing employee benefit plans could be held personally liable for mistakes, mismanagement, or breaches of duty. This type of insurance provides protection against financial exposure resulting from such claims.
Mitigating the Impact of Regulatory Changes: Fiduciaries are required to stay up-to-date with evolving regulations and compliance requirements. As rules and guidelines change, businesses face greater risk of making inadvertent errors. Fiduciary liability insurance helps safeguard against legal consequences related to non-compliance or mistakes in plan management.
Peace of Mind for Fiduciaries: Managing employee benefit plans can be complex and carries significant responsibility. Fiduciary liability insurance helps ensure that fiduciaries can perform their duties with confidence, knowing they are protected in case of mistakes or unforeseen issues.
Essential for Employee Benefit Plan Trustees: If your business is a trustee or fiduciary for employee benefit plans, fiduciary liability insurance is an essential part of risk management. It provides crucial coverage for both the organization and its trustees in the event of a lawsuit or claim related to the management of these plans.
By partnering with us, you can trust that your business and fiduciaries are covered, allowing you to focus on managing and administering employee benefits with confidence.
Contact us today to learn more about our fiduciary liability insurance options and how we can help protect you and your business from the risks associated with managing employee benefit plans.