Fiduciaries be aware – your personal assets are at risk.
Why you and your organization need protection. If your company sponsors a retirement or health plan for its employees and you are involved in any way with the management of that plan, you are likely considered a fiduciary. This means you can be held personally liable for what happens to the plan under ERISA law. As standard Directors & Officers and Employment Practices Liability policies exclude claims for ERISA violations, you cannot rely on those policies for protection in case of litigation. Defending a claim – even if it is without merit – is expensive and time consuming. As a fiduciary, you cannot wholly transfer your liability to another party, such as a professional investment firm or third-party plan administrator.
For many employers, offering an employee benefit plan is a way to attract and retain workers. But this will mean nothing if your business collapses under staggering litigation costs. The individual fiduciary can be held personally liable and their assets at risk if they do not carry out their obligations of:
- Acting in the best interests of the plan participants for the purpose of providing benefits
- Acting with the care, skill and diligence that a prudent person would use in a similar situation
- Diversifying plan assets
- Following the plan document
Fiduciary Liability coverage is critical to the well-being of your company – particularly given the growing exposures in today’s volatile climate. It covers your company’s benefit plans and helps protect its directors, natural person trustees, officers and employees from costly litigation. Professional Insurance Management will work with you to customize coverage for your specific needs.
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