A fiduciary is any individual involved in the management of a retirement or health plan. The passage of the Employee Retirement Income Security Act of 1974 (ERISA) significantly increased fiduciary liabilities in the United States. Fiduciaries can be held personally responsible for benefits plans losses incurred due to their breach of fiduciary duties. This means you could be held liable for the mismanagement of accounts.
Reasons to Have Fiduciary Insurance
There are three main groups that can file fiduciary lawsuits: employees participating in benefits plans, The Department of Labor and The Pensions Benefit Guarantee Corporation. Fiduciary liability insurance claims can be filed for a number of different types of errors and fraudulent behavior. These include fraud, theft, embezzlement, denial or change of benefits, conflict of interest, administrative error, improper advice or counsel, failure to adequately fund a plan or wrongful termination.
You could be on the line if a lawsuit goes to court. Fiduciary liability insurance protects you from such lawsuits. It pays the legal costs to protect your assets and provides legal counsel. Don’t risk the consequences of legal action. Invest in coverage. Fiduciary responsibilities are heavy. Reduce your stress by knowing you are covered. A lawsuit could potentially ruin you financially and damage your reputation.