Fiduciary Liability Insurance

Fiduciary liability insurance is a type of insurance that provides coverage for individuals and businesses that serve as fiduciaries for employee benefit plans, such as pension plans or 401(k) plans.

A fiduciary is a person or entity with a legal obligation to act in the best interests of another party, such as the participants in an employee benefit plan. Fiduciary liability insurance provides protection to the fiduciary against claims alleging that they have breached their fiduciary duties, such as mismanagement of plan assets or failure to act in the best interests of plan participants.

Fiduciary liability insurance can cover a wide range of claims, including claims for breach of fiduciary duty, errors and omissions, and other types of alleged wrongdoing. The policy can cover legal fees, court costs, and any damages that may be awarded as a result of a covered claim.

Fiduciary liability insurance is important for businesses that serve as fiduciaries for employee benefit plans and individuals who serve as trustees or administrators for such plans. Without proper coverage, a claim for breach of fiduciary duty can result in significant financial losses and damage to the reputation of the fiduciary.

It’s important to note that fiduciary liability insurance does not cover intentional acts of wrongdoing, such as fraud or embezzlement. It’s also important to carefully review the policy terms and exclusions to ensure that the coverage provided is appropriate for the specific needs of the business or individual.