Fiduciary Liability Insurance
When you designate key personnel in your company to make decisions on behalf of your workforce, you essentially delegate responsiblity while also assigning risk to that individual. A fiduciary is a person in a position of trust who is legally required to act in the best interests of those they serve when making financial, legal or business decisions. A fiduciary can never put their own intersts first. Fiduciary liability insurance protects your fiduciary—the person in you company that you may have appointed to administer your company’s pension plan, profit-sharing program, or other employee benefit programs. This insurance will pay, on behalf of your company, against losses for errors and omissions, or the failure of your admistator to act prudently according to the Pension Reform Act of 1974, also know as the Employee Retirement Income Security Act (ERISA).
Note that ERISA class action lawsuits are not confined to the largest employers. Companies of all sizes are vulnerable. Particularly in times of economic transition—when layoffs, workforce adjustments, and corporate mergers and acquisitions are more likely to occur.
Although there are no “silver bullets” protecting you from litigation, the best protection for your company is for your fiduciary to understand his/her role as defined by ERISA and to purchase fiduciary liability insurance.
Protection for those who administer pension and welfare funds, profit-sharing and other employee benefit programs against loss for errors and omissions by the administrator. The need for this coverage was created by the Employee Retirement Income Security Act (ERISA) of 1974. Also known as pension trust liability insurance.