Fiduciaries, such as company executives, HR professionals, or third-party administrators, oversee employee benefit plans, including retirement and health plans. If a fiduciary fails to act in the best interests of the plan participants—whether through negligence, error, or omission—they can face significant legal consequences. Fiduciary Liability Insurance covers these risks, protecting both the fiduciaries and the company from financial loss.
One of the most significant risks covered by Fiduciary Liability Insurance is the mismanagement of plan assets. Errors in managing investments or other assets can lead to substantial financial losses for plan participants, which can, in turn, result in legal claims against the fiduciary.
Fiduciaries are legally obligated to adhere to the guidelines set forth in plan documents. Deviating from these documents, whether intentional or accidental, can expose the fiduciary to legal action. Fiduciary Liability Insurance provides coverage for claims that arise from such failures, ensuring that fiduciaries are protected even in complex legal scenarios.
Mistakes made during employee enrollment in benefit plans or benefit disbursement can lead to negligence claims. These errors, whether due to oversight or misunderstanding, can be costly to resolve. Fiduciary Liability Insurance covers these risks, protecting against claims related to administrative errors in plan management.
While Fiduciary Liability Insurance provides critical protection, adopting best practices can help minimize your risks:
Fiduciary Liability Insurance is a vital component of a comprehensive risk management strategy for any business offering employee benefit plans. It provides crucial protection against the financial and legal risks associated with fiduciary responsibilities, ensuring your business can operate with confidence and security.
Protect your business and your fiduciaries by investing in a Fiduciary Liability Insurance policy that meets your specific needs.
Contact Tooher-Ferraris Insurance Group today to learn more about our tailored insurance solutions and how we can help safeguard your company’s financial future.
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