Protecting the personal assets of plan fiduciaries
Fiduciary Liability Insurance - Alliance Benefit Group
Companies generally offer employee benefit plans to help attract and retain quality employees. However, you may not be aware of the liability exposure from the management of these plans. Fiduciary Liability Programs are specifically designed to respond to claims arising out of improper investments, insufficient funding, or breach of fiduciary duties.
Alliance Benefit Group is pleased to provide our clients with Fiduciary Insurance as part of our dedication to providing comprehensive employee benefits consulting and administration services.
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What is Fiduciary Insurance ?
- Pays the legal liability arising from claims for alleged failure to act prudently.
- Protects the personal assets of a plan fiduciary due to allegations of breach of fiduciary duties.
- ERISA explicitly allows for the purchase of fiduciary insurance. It could be a breach of fiduciary duty if a claim arises and no insurance is in place that was readily available.
Is Insurance important for ERISA Plan Administrators ?
- ERISA requires that a fiduciary of an employee benefit plan act solely in the best interest of participants and beneficiaries.
- Fiduciaries can be held personally liable for any breach of their responsibilities. Studies indicate significant increases in claims severity and frequency over the past several years.
How much does it cost ?
The premium indications provided below are for illustrative purposes only. Actual premiums may vary and will require a fully completed application and underwriter approval. Estimated premiums are based solely on Defined Contribution Plans.
| Plan Assets | # of Participants | Deductible | Premium Low | Premium High |
| < $5,000,000 | <100 | $0 | $600 | $900 |
| $5,000,001 - $7,000,000 | <100 | $0 | $800 | $1,100 |
| $7,000,001 - $10,000,000 | <200 | $0 | $900 | $1,200 |
| $10,000,001 - $15,000,000 | <200 | $0 | $1,000 | $1,300 |
| $15,000,001 - $20,000,000 | <300 | $0 | $1,100 | $1,400 |
| $20,000,001 - $25,000,000 | <300 | $1,000 | $1,200 | $1,500 |
| $25,000,001 - $30,000,000 | <400 | $1,000 | $1,500 | $1,800 |
| $30,000,001 - $40,000,000 | <400 | $1,000 | $1,900 | $2,200 |
| $40,000,001 - $50,000,000 | <400 | $5,000 | $2,300 | $2,600 |
Estimated premiums for $1,000,000 limits of liability, higher limits may be available.
What limit should I purchase?
A good rule of thumb is $1,000,000 limit for plans up to $20,000,000. For plans greater than $20,000,000, 5% of plan assets, or 10% if your plan includes company stock.
