Companies offer employee benefits to attract talent, such as 401(k)s, ESOPs, welfare plans, and pensions. Benefit plan administrators are fiduciaries, and companies must also accept fiduciary responsibility. Fiduciary liability insurance covers fiduciaries.
Companies that provide employee benefits like a 401(k) plan.
People in charge of employee benefits funds or property.
Companies must prioritize integrity and momentum in addition to fiduciary responsibility.
If the plan manager messes up, employees may blame everyone, even their employer. Fiduciary liability insurance is optional, unlike an ERISA Fiduciary Bond, which is required by law. This policy protects companies from legal liability related to employee benefit plan sponsorship, including defense costs, judgments, or settlements.
An employee claims a plan official made errors in calculating their benefits.
If an employee thinks they received inappropriate investment advice.
Employees may file a lawsuit over retirement plan fees they disagree with.
Review your policy documents to confirm your insurance coverage. Fiduciary liability insurance is optional but protects companies from legal liability regarding employee benefits plan sponsorship, including defense costs, judgments, or settlements against the company. If the plan administrator mishandles the plan, employees may blame all parties involved, including their employer. A required ERISA Fiduciary Bond provides additional coverage.
If a plan official makes risky investments in an employee’s retirement plan.
If the retirement plan adviser provides bad advice, the employee’s investments may suffer.
If a representative mishandles healthcare or welfare plans and causes benefit loss or errors.
If a manager unfairly denies or alters an employee’s benefits.
If a plan officer chooses bad service providers.
Here’s a claim example that illustrates what Fiduciary Liability Insurance covers:
As a fiduciary, you have specific responsibilities and face penalties for not meeting them. This includes plan sponsors, who can be held accountable for losses if proper care is not taken. The plan administrator, such as Vanguard, is also considered a fiduciary with control over investments.
These products are alike in addressing fiduciary responsibility, but differ in unique ways.
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