MANAGEMENT LIABILITY

Fiduciary Liability Insurance

Monarch E&S is proud to offer executive, professional and cyber liability coverage through our sister company, CSRisks. CSRisks is a leading executive, professional and cyber liability wholesale insurance brokerage. Their knowledgeable experts provide analytical capabilities, a consultative approach and expert insurance broking services. With access to over 30 A rated insurance carriers, both admitted and non-admitted, their specialization means they quickly provide the cost-effective coverage and analysis retail agents rely on.

What is Fiduciary Liability Insurance?

Fiduciary liability insurance protects individuals who manage employee benefit plans against claims of mismanagement. Fiduciary liability insurance protects against unintentional failings or lapses by a company and its employees. It covers the legal expenses of defending against a claim, as well as any financial losses the plan may have incurred. Fiduciary liability insurance is different from ERISA fidelity bonds, which protect plan participants against fraud, theft, and other deliberately fraudulent acts.

Fiduciary Liability Coverage is designed to protect administrators and executives from claims stemming out of the mismanagement of employee benefit plans. Any company offering a 401(K), pension plan, medical, life or disability insurance to their employees could be at risk.

Who Needs Fiduciary Liability Insurance?

Fiduciary liability insurance, also known as management liability insurance, protects businesses and their representatives from financial losses if they are sued for claims of negligence or breach of duty. It covers errors, omissions, and breaches of fiduciary duty in the management and administration of employee benefit plans.

Fiduciary liability is the responsibility on trustees, employers, fiduciaries, professional administrators, and the plan itself with respect to errors and omissions (E&O) in the administration of employee benefit programs as imposed by the Employee Retirement Income Security Act (ERISA).

This coverage is vital for those responsible for administering, overseeing, or providing advice related to employee benefit plans.

According to the ERISA Act of 1974 (Employee Retirement Income Security Act), individuals who make decisions about their company’s employee benefit plans are most likely considered fiduciaries.

Why Do They Need Fiduciary Liability Insurance?

Fiduciaries can be personally liable for errors, omissions, or breach of duty incurring losses to a benefit plan. Accountability can also be accrued to the company who sponsors the plan, the plan itself, or other outside consultants giving financial advice for the plan. Specific Fiduciary Liability coverage is usually not included as part of a company’s general liability plan, and must be purchased separately.