Fiduciary Liability
Under the Employee Retirement Income Security Act of 1974 (ERISA), people who oversee benefit plans owe numerous duties to the plans’ participants/beneficiaries and can be held personally liable for errors or omissions in administering plans, or for any breach in their ERISA fiduciary duties.
Fiduciary Liability insurance protects trustees and other fiduciaries when they face claims of breach of fiduciary duty in their service to retirement or healthcare benefit plans.
The kinds of exposures plan fiduciaries face are diverse and include allegations of imprudent investing if a plan loses money or does not meet an employee’s growth expectations, breaches of fiduciary duty in selecting or monitoring service providers, social investing and other matters. Other exposures include errors or delays in responding to requests for investment changes, distributions and rollovers, paying excessive fees, not adhering to plan documents, failing to make contributions on a timely basis and engaging in numerous types of transactions specifically prohibited by ERISA.
Eligible Accounts:
- Single Employer (public company, private company, non profit organization)
- Union/Multiemployer
- Public Entity/Government
There are common misconceptions that public entity plans are not bound to fiduciary rules like those governing private sector retirement plans and that they are fully protected by sovereign immunity, statutory indemnification or other governmental policies. However, there are many gaps in these perceived protections that may put plan assets and trustees’ personal assets in jeopardy.
When allegations such as mismanagement and underfunding of plans emerge, public entity plan trustees can find themselves the target of lawsuits — even when the actions that led to the allegations were beyond their control. All too often, sovereign immunity is not a shield.
If accused of a breach of fiduciary duty, public fund trustees may be held personally liable for any losses to the plan, in addition to funding their own defense costs.
Coverage
- Primary and excess
- Limits capacity exceeding $100,000,000 for larger risks
- Claims Made forms
- Indemnity and duty to defend wording
- Broad definition of “Wrongful Act” for fiduciary and administrative exposures to include any breach of an ERISA or other fiduciary duty and error or omissions in the administration of the plan
- Civil penalties under sections 502(i) and 502(l) of the Employee Retirement Income Security Act (“ERISA”).
- Pension Protection Act (“PPA”) including 502(c) liabilities
- Health Insurance Portability and Accountability Act (“HIPAA”) coverage including penalties imposed by the Health Information Technology for Economic and Clinical Health Act (“HITECH”)
- Health Care reform penalty coverage for penalties under recently enacted health care reform law
- Patient Protection and Affordability Coverage Act (“PPACA”)
- Defense cost protection for trustees facing liability for non-fiduciary duties i.e. "settlor" functions
- Closing Agreement Program (“CAP”) /Voluntary compliance program (“VCP”) for IRS and DOL penalties: Coverage for a broad range of regulatory correction programs at the IRS and DOL, allowing trustees to proactively address potential problems before they become claims
- Broad Definition of "Claim" to include "a written notice of subpoena"
Applications:
Single Employer:
Private company (package application 1)
(includes Directors & Officers, Employment Practices, Fiduciary, Crime, Professional, Employed Lawyers, Kidnap & Ranson/Extortion
Private company (package application 2)
(includes Directors & Officers, Employment Practices, Fiduciary, Data Security & Privacy Insurance)
Union/Multiemployer:
Public Entity:
In most instances, Hull & Company, Inc. (RFO) can develop quotes off of any insurance company application so long as it is current and duly completed. If an application does not provide sufficient information, an underwriter will ask for additional information prior to quoting or may provide a non binding indication with conditions that must be satisfied prior to offering a bindable quotation.
ARTICLES:
White Paper on Governmental Benefit Plans
How to take advantage of ERISA's anniversary
On Line Quoting:
ERisk/Scottsdale
This link will enable you to quote online through ERisk Services. The quote will be sent to us and then forwarded to you. Please contact us if you would like your own link that will give you instant quotes with your company's logo.
The online application is designed as a package for private companies and non-profit organizations and insucldes the coverage sections shown below. The applicant only needs to complete the desired Coverage Sections along with the basic application section I through VI.
Each coverage section can be purchased on a standalone basis or included in combination with any of the other coverage offered.
Private Company D&O/EPL/Fiducuiary/Crime
- Directors & Officers and Company Coverage Section
- Employment Practices Coverage Section
- Fiduciary Coverage Section Information
This product targets private companies with up to $50 million in plan assets. Union and Multi-employer plans are NOT eligible for this product.
All or most other coverages that comprise the RFO practice are appropriate.
Contact a staff broker to discuss a particular account.
All insurance product and/or coverage descriptions are informational only. It is neither an offer to sell nor a solicitation to purchase any particular insurance product. Coverage may not be available in all jurisdictions.