The executive or manager responsible for the management of employee benefits such as retirement plans, profit-sharing, savings, and health care options is considered a fiduciary. They are required to work and act in the best interests of those enrolled in the plans. Fiduciaries are responsible for selecting investments appropriately and precisely following benefit plans as chosen by the individual or the company.
To protect the interests of employee benefit and pension plan beneficiaries, the Employee Retirement Income Security Act of 1974, or ERISA, was created. As a result, a fiduciary can be held personally accountable for a breach of duties, including the care of money or assets for employees of the company. With this great responsibility comes the potential for increased liability that requires the right protection.
Offering employee benefits like retirement plans or health insurance is a popular way to boost employee retention. In fact, they are required to attract good talent. However, as a business owner, you need to protect your personal assets from potential litigation costs associated with lawsuits due to alleged breaches of fiduciary responsibility. Moreover, your senior managers who are plan fiduciaries need the coverage as well because they can be sued and held personally liable.
For these reasons and many others, fiduciary liability coverage is critical for the welfare of businesses and trustees that offer employee benefit plans. Whether you’re a a private company, a nonprofit organization, financial institution, or a public corporation, and you offer employee benefit plans, Fiduciary Liability coverage is a necessity.
For questions regarding our fiduciary liability coverage products, call us today at 781-444-3050.