As discussed on our website, “Fiduciary liability protects welfare and pension plans, the sponsor organization, and individuals acting as fiduciaries or administrators of the plans. The policy covers liability arising out of violations of any of the responsibilities, obligations, or duties imposed upon fiduciaries by ERISA.”
To clarify, ERISA refers to the Employee Retirement Security Act of 1974 which imposes one of the strictest standards of care on fiduciaries responsibility for management and administration of employee benefit plans. This act also defines clearly a fiduciary as an individual/entity that exercises discretionary authority over the management and administration of a plan/plan assets and or renders investment advice.
The following includes a list of SOME of the claims that could be made against fiduciaries:
- Administrative error
- Cash balance plan conversions
- Denial or change of benefits
- Improper advice
- Inappropriate selection of advisors
- Incorrect benefit calculations
Click HERE for a complete list of the common fiduciary liability claims.
Some companies assume that the ERISA Fidelity Bond protects the interest of fiduciary. Such an assumption is dangerous due to the fact that ERISA Fidelity Bond includes coverage limited only to theft or fraud losses and only protects the plan, NOT the fiduciaries themselves.
For additional information on Fiduciary Insurance, click HERE or give us a call at (888) 725-7776.