Fiduciary Liability Coverage
Employees rely on their benefits to help make life easier. And when a fiduciary mismanages those benefits, it’s a violation of the Employee Retirement Income Security Act of 1974 (ERISA). The Act states that fiduciaries are liable for benefit plan losses if the losses occur because of their errors or omissions. They are also liable if the losses occur because they are in breach of their fiduciary duties.
Fiduciary liability coverage provides protection to a company when it’s facing a fiduciary related lawsuit. Company employees and the government can bring a lawsuit against company fiduciaries, the company itself, and its plans. Should this happen, the business can potentially face a devastating financial fallout.
A company can face claims regarding denial of benefits, improper counsel or advice, clerical errors, and wrongful termination of a plan. It’s a wise decision for any company with a retirement plan to get protection against claims made in relation to breaches of the ERISA.
Fiduciary liability insurance also works well with general Liability insurance or directors and officers liability coverage. With all three policies in place, a business will have stronger protection against a wider variety of claims.