Definition of a Fiduciary:
The ERISA definition of a fiduciary is very broad. It is any person so named in the plan or any person who exercises any discretionary authority or control with respect to the management or administration of the plan or its assets.
Why would a fiduciary unnecessarily expose him or herself to claims from the widow of a 65-year-old 401(k) participant who invested entirely in employer stock or entirely in a technology fund? What about the 26-year-old who is invested entirely in cash—year after year? It is inconceivable that a responsible officer or committee member would accept that potential liability without making absolutely sure that they were protected.
Companies that sponsor employee benefit plans or retirement plans and don’t carry fiduciary liability have a serious gap in their insurance portfolio. The court system is being flooded with claims of negligence and imprudence against the fiduciaries. Under ERISA (Employee Retirement Income Security Act), fiduciaries can be held personally liable for a variety of reasons including the selection of plan investment options, monitoring those investments and educating employees on those options. View Fiduciary Liability Claim Scenarios.
You may think your D&O policy, employee benefits liability or fidelity bond has you covered. But most of these policies exclude fiduciary liability exposures! Our experts will help you identify ERISA-related exposures and provide you with the appropriate coverage to minimize your potential costs. Contact us today!