Fiduciary Liability/Employee Benefits Liability/ERISA Bond


Fiduciary Liability

If you design, administer and manage pension and employee benefit plans, you have a Fiduciary Liability exposure. Fiduciary Liability policies provide coverage for anyone who exercises any discretionary authority or control in managing pension or benefit plans, provides investment advice for compensation or has any responsibility in administering the employee benefit plans. This includes failure to invest plan assets in a prudent manner or failure to select a qualified service provider for a plan.

Employee Benefits Liability

An Employee Benefits Liability policy provides coverage for claims that involve nondiscretionary or administrative errors in overseeing employee benefits. Examples include failing to name the correct person as the beneficiary on a life policy or failure to enroll an employee in an employee benefits plan.

ERISA Bond

All fiduciaries and people who handle plan funds or other plan assets are required to be bonded for 10 percent of the total amount handled with a minimum of a $1,000 bond up to a maximum of $1,000,000 per ERISA.


How these policies differ in coverage may be better explained with a few scenarios:


Fiduciary Liability

If you make a bad investment decision causing the pension fund to become insolvent.

Employee Benefits Liability

You fail to enroll an employee on the health insurance policy and they have an out of work injury with no health insurance in place.

ERISA Bond

A fiduciary steals pension funds.

These types of policies are a great way to fill in the gaps and protect your personal assets.

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