Article

An essential part of a risk management strategy

One of the least-known insurance products on the market is the fiduciary liability insurance policy. However, it might be the only insurance that sufficiently shields individuals from liability for managing or administering an employee benefit plan, including senior company executives who engage investment managers and payroll clerks who handle enrollment forms.
 
Employers and plan fiduciaries are increasingly being held accountable for their conduct (or lack of action) concerning employee benefit programs due to the rising frequency of costly and time-consuming litigation and regulatory activities in today’s shifting legal environment. Therefore, fiduciary liability insurance is crucial to any elaborate risk management strategy.

We’ve discovered that most employee benefit plans do not include detailed cybersecurity coverage. Even while the companies that sponsor these plans may have cyber insurance that covers the entire company, this is insufficient because the sponsoring entity’s policy frequently falls short of protecting the particular risks associated with employee benefit plans. We believe purchasing specific cyber and crime insurance for sponsored plans is the best fiduciary practice,

Total plan assets managed, insurance limits, and service provider quality are some of the most frequent variables that affect fiduciary liability premiums. Typically, an organization can add fiduciary liability insurance to other policies like directors and officers insurance and employment practices liability insurance, and it is typically a reasonably priced product. Up to $20 million in annual coverage is possible under most insurance underwriters’ programs.