Coverage tailored to a certain financial risk.
Fiduciary liability insurance protects against a very unique danger that can be financially disastrous. The risk is breach of fiduciary obligations, which stems from the Employee Retirement Income Security Act of 1974 (ERISA), which oversees many employee benefit plans.
The Employee Retirement Income Security Act of 1974, also known as ERISA, was enacted to increase the level of accountability for fiduciaries in order to safeguard those who use employee benefits.
People within or outside of your company can be fiduciaries if they have any influence on your employee benefits plan. Accountants, administrators, consultants, financial advisors, investment managers, and lawyers are some examples.
Fiduciary duties apply to corporate officers who manage such schemes. This means that they are both ethically and legally obligated to act in the best interests of their employees, and they can be sued if they fail to do so (even unintentionally). A breach of this responsibility could be as easy as making an investment decision for a failed plan.
When it comes to ERISA lawsuits, a fiduciary may be held financially accountable for making good on any damages resulting from their alleged faults or omissions, which may be staggering when it comes to a workforce's retirement benefits. Because many general liability insurance policies do not cover ERISA claims, a fiduciary liability insurance policy may help to limit this risk.
We may be able to assist you in obtaining a fiduciary liability insurance policy for your company. To learn more, please contact us.