Why fiduciary liability insurance
The complicated regulations surrounding healthcare, pensions, markets, and exchanges make crafting benefit plans difficult for employers and can expose them to both business and personal liabilities. Employers and leadership can face legal action from plan participants, the Department of Labor, and the Pension Benefit Guarantee Corporation with costly defense and settlement fees exceeding $1 million.
Employers that provide benefits are regarded as “fiduciaries” and those in charge can face personal responsibility if they don’t manage the plans correctly, which could jeopardize assets such as family and college savings or even homes.
What’s typically covered
Fiduciary insurance, a type of insurance policy not included in directors and officers liability policies, offers financial protection for fiduciaries. This policy provides protection in the case of benefit-plan losses and covers defense costs, settlements, and more:
- Bad advice or improper counsel
- Poor insurer, mutual fund or third-party administrator’s choices
- Plan administration errors including conflict of interest
- Benefits denial, changes or reductions
- Funding a plan insufficiently or failing to diversify investments
- Squandering assets
- Incorrect plan termination
Contact ZRM brokerage to get started.
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.
