Fiduciary Liability Insurance
Fiduciary liability insurance covers claims arising from the administration of ERISA-governed employee benefit plans. Plan administrators, trustees, and the sponsoring organization can be personally liable for investment selection decisions, fee disclosure failures, and prohibited transactions. The policy covers defense costs and settlements from participant lawsuits and DOL investigations. This is one of the most under-purchased commercial lines, especially for mid-size firms sponsoring retirement plans. Contact us to review your program.
Prevent Fiduciary Liability Claims
Human errors can often lead to fiduciary liability claims. Discover how to protect yourself, such as setting up the appropriate policies and utilizing best practices.
Who actually needs fiduciary liability coverage
Any business that sponsors or administers an ERISA-governed benefit plan carries fiduciary exposure. That includes 401(k) plans, defined benefit pensions, health and welfare plans, and ESOP structures. The people who select investment options, set plan fees, or make administrative decisions about participant benefits are fiduciaries under ERISA, and their personal assets are at risk if a participant files suit.
The most common fiduciary claims involve excessive plan fees, imprudent investment selection (particularly target-date funds), and failure to monitor plan performance. These cases have increased significantly since the DOL stepped up enforcement. Even small plans are now seeing participant-driven lawsuits.
We place fiduciary liability alongside D&O and EPLI because the same decision-makers are exposed across all three policies. Coordinating limits and retentions across the management liability tower prevents gaps.
