What is Fiduciary Liability Insurance?
Fiduciary Liability pays, on behalf of the insured, the legal liability arising from claims for alleged failure to prudently act within the means of the Pension Reform Act of 1974. The term “insured” is generally defined as a trust or employee benefit plan, any trustee, officer or employee of the trust or employee benefit plan, employer who is the sole sponsor of a plan and any other individual or organization designated as a fiduciary. Group life and medical expense plans, along with pension and retirement plans, are within the scope of this law. Two other coverages related to fiduciary liability insurance include: • Fidelity Bonds – These are required by law (ERISA bonding). In the event dishonest administrators or trustees are accused of financially harming an employee benefit plan, these bonds may be used, but only for the benefit of the plan and the plan’s beneficiaries. This bonding insurance will not protect the trustees themselves from liability claims. This coverage differs fr
