Fiduciary Liability
Fiduciary Liability insurance
Protecting the People Managing Your Employee Benefit Plans
Fiduciary Liability Insurance safeguards the company and the individuals who manage employee benefit plans (e.g., 401(k), 403(b), pension, health & welfare, ESOP) against allegations of breach of fiduciary duty under ERISA and similar laws. Claims can arise from investment losses, excessive fees, plan administration errors, and eligibility or COBRA mistakes—and defense costs can escalate quickly even when you’ve done everything right.
Protect your plan sponsors, committees, and HR teams from costly ERISA and benefits‑administration claims. We design fiduciary programs that match your plan complexity, vendor mix, and fee profile—so your team can manage benefits with confidence.
Why Fiduciary Liability Matters
And Who Needs Coverage
Every employer is exposed—regardless of size or industry. Below outlines some of the more specific reasons Fiduciary Liability is essential, as well as examples of who, most particularly, needs fiduciary liability coverage.
Litigation & fee trends
- Class actions over excessive fees, record-keeping arrangements, and investment selection have increased the baseline exposure for even mid‑sized plans
Administrative complexity
- Eligibility errors, payroll interfaces, and vendor changes drive frequent participant disputes
Personal Exposure
- Fiduciaries can be personally named; indemnification may not fully protect them in every scenario
Plan Diversity
- ESOPs, frozen pensions, MEWAs/VEBA & HSAs/HRA structures introduce unique oversight risks
Organizations
Those that sponsor any employee benefit plan, including:
- 401(k) / 403(b) & cash balance/pensions
- ESOPs & stock heavy plans
- Health & welfare plans (medical, dental, vision, life, disability)
- Supplemental benefits (FSA, HSA, HRA, commuter)
Employers
Especially important for employers with:
- $25M+ in plan assets (heightened fee/litigation sensitivity)
- Multiple plans/vendors (or recent vendor transitions)
- High growth or high turnover (eligibility/enrollment error risk)
- ESOP or company stock in plan lineup
- M&A activity (plan mergers, spin‑offs, or freezes)
Fiduciary Coverage Overview
Coverage Components
Core Covered Allegations
- Breach of fiduciary duty (prudence, loyalty, diversification, monitoring)
- Improper plan investment selection or monitoring (target date funds, stable value, company stock)
- Excessive record-keeping / administration or advisory fees
- Errors in plan administration (eligibility, enrollment, contributions, distributions, loans, QDROs)
- Misstatements or misleading communications to participants
- Failure to remit contributions timely
- COBRA/benefit continuation mistakes
- ESOP‑related oversight (valuation, process, conflicts)
Common Policy Enhancements
- Defense Costs (within or outside limits available)
- Settlements & Judgments for covered wrongful acts
- Voluntary Compliance Program (VCP/EPCRS) Sublimits
- HIPAA Privacy Wrongful Act Sublimits
- Pre‑claim Inquiries / Document Requests
Highlights & Options
- Broad “Insured” Definition (entity, plan & fiduciaries)
- Settlor vs. Fiduciary Acts Clarity with defense for mixed allegations
- Independent Fiduciary Expense sublimits for conflicted transactions (e.g., ESOP)
Fiduciary Fits with D&O and EPL
A Comprehensive Suite of Liability Insurance
D&O covers : Covers governance & securities/board matters—not plan mismanagement | EPL covers : Covers employment‑related allegations (harassment, discrimination, retaliation) | Fiduciary covers : Covers plan management errors & ERISA duty breaches
Together, they deliver a complete management liability suite.
Additional Products
Comprehensive Management Liability Solutions
Private Company D&O Liability Insurance provides critical protection for your executives and board members when facing allegations of wrongful acts in managing the business. Even privately held companies face significant litigation risk—from investors, employees, customers, regulators, and competitors.
D&O Liability | Private
FI D&O/E&O Insurance provides comprehensive protection for: Directors & Officers facing governance‑related claims, the institution for securities, regulatory, and entity‑level allegations, and professional services liability (E&O) exposures arising from financial advice, custody, lending, asset management, and transaction‑related work.
D&O/E&O | Financial Institutions
Public Directors & Officers coverage sets the foundation by protecting leadership from exposure, and coupling D&O insurance with EPLI, Fiduciary, and/or Fidelity (Crime) Insurance, creates comprehensive coverage that addresses any employee-realted portion of management liability risk.
D&O Liability | Public
EPLI, protects businesses from claims by current, former, or prospective employees alleging wrongful employment actions like discrimination, sexual harassment, wrongful termination, retaliation, and failure to promote, covering legal defense costs, settlements, and judgments that standard business policies don't. It's crucial because employees can sue for these issues at little cost to themselves, making EPLI vital for managing significant financial risks.
Employment Practices Liability
Not‑for‑Profit organizations: charities, foundations, associations, educational institutions, religious institutions, and community groups - face unique governance and stakeholder pressures. Even without shareholders, NFPs are exposed to donor disputes, regulatory scrutiny, financial management allegations, and employee‑related claims.
D&O Liability | NoN-Profit
Fidelity, or crime, insurance protects businesses from financial losses due to dishonest acts, like theft, fraud, or embezzlement, by employees, volunteers, or third parties with access to funds, essentially acting as a safeguard against internal and sometimes external criminal behavior, often bought as a fidelity bond or commercial crime policy. It covers losses of money, property, and securities from acts such as forgery, computer fraud, funds transfer fraud, and social engineering, compensating the company for damages up to the policy limit.