FIDUCIARY

WHAT IS FIDUCIARY LIABILITY INSURANCE?

Fiduciary liability insurance is applicable to only those corporate entities that offer employee retirement benefits or pension plans. The Employee Retirement Income Security Act (ERISA), passed in 1974, was enacted to establish a set of laws governing the fiduciary responsibilities of business entities that manage, administer, or design these plans in order to guarantee employees would receive these benefits. As a result, this law set forth list of legal exposures businesses must insure against.

 

WHAT LOSSES ARE COVERED?

Corporate entities can be held liable for the acts, errors, or omissions of outside plan administrators (Fiduciaries). Additionally, Board Members and Directors and Officers can be held personally liable for breaching these responsibilities.

Fiduciary Insurance  covers indemnity payments- including compensatory awards and settlement costs- as well as defense costs and punitive damages. It does not cover intentional acts of fraud or personal profit. Additionally, most policies cover Voluntary Compliance fees, which are payments made to correct deficiencies in underfunded plans.

 

 

PLANS SUBJECT TO ERISA

  • PENSION
  • PROFIT-SHARING
  • 401K
  • EMPLOYEE STOCK OWNERSHIP
  • TAX REFORM ACT STOCK OWNERSHIP
  • WELFARE
  • LIFE INSURANCE
  • MEDICAL INSURANCE
  • DENTAL AND VISION INSURANCE
  • ACCIDENT INSURANCE
  • DISABILITY INCOME
  • FUNDED SCHOLARSHIP
  • UNEMPLOYMENT
  • PREPAID LEGAL SERVICES
  • SEVERANCE PAY

 

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