Fiduciary Liability Insurance
Fiduciary Liability Insurance is targeted at protecting businesses’ and employers’ assets against fiduciary-related claims of mismanagement of employee benefit plans. Fiduciaries are responsible for providing a broad range of investment alternatives and minimizing the expenses associated with those investments; you cannot avoid liability solely by blaming plan participants for their investment decisions. A fiduciary can be sued for not following the plan documents and plan participants regularly sue claiming denial of benefits in violation of plan documents. A fiduciary also cannot escape responsibility by blaming a service provider. According to the Department of Labor, it is the responsibility of the fiduciary to vet and monitor any outside vendor.
There is always potential liability for officers of an organization acting in some capacity relating to an employer’s pension, savings, profit-sharing, employee benefit, and health and welfare plans. This type of coverage¬†is designed to cover defense costs and personal liability of fiduciaries.