Fiduciary Liability Insurance:

A fiduciary liability policy protects the personal assets of a plan Fiduciary due to allegations of breach of fiduciary duties.

What can fiduciary insurance policies cover?

1. Breach of fiduciary duties

2. Negligent errors and omissions

3. Improper disclosures to plan participants

4. Remiss investment advice

5. Imprudent choice of outside service provider (OSP)

6. Faulty advice of counsel

7. Improper amendments to plan documents

Why Purchase Fiduciary liability?

To Avoid Loss of Plan Assets – Using plan assets to defend ERISA litigation is a very questionable use of plan assets, and potentially a breach of fiduciary duty. Another potential breach is for the plan to lose money that could have been paid by a fiduciary liability policy, had one been in place. ERISA explicitly allows for the purchase of fiduciary liability insurance.

Typical Fiduciary Liability Insurance coverage highlights:

• Broad definition of insured including the company, its benefit plans and its fiduciaries
• Optional $100,000 sublimit for qualifying voluntary settlement fees
• Optional coverage for defense outside the limits of liability
• Coverage for 502(i) and 502(l) civil penalties
• Broad employee benefit plan language including plans outside the United States of America and any excess benefit plans
• Broad wrongful acts definition includes allegations of breach of fiduciary duty and errors and omissions
• No deductible will apply for most risks