Fiduciary liability was established by the federal government in order to guarantee employees that the employee pension or welfare benefit plans they elected to participate in were given the benefits that they had been promised. Because of the liabilities that were established through this regulation, the need for an insurance plan to aid businesses became widespread, and fiduciary liability became widespread among the business industry.
In spite of the variation in benefit plans, companies, industries, and employees, there are several areas of liability that threaten fiduciary duties. Here are some of the more common fiduciary liability insurance claim examples.
- Claims regarding fees charged for 401k plans
- Claims against company stock that is rendered worthless
- Claims concerning healthcare plan administration where treatment was withheld or the provider network contained incompetent providers
- Claims involving risk investments by the pension fund manager where benefit payments were lost
In addition to the claims against benefit status with the above-mentioned areas, the team at Axis Insurance reveals that errors and omissions coverage is often included in fiduciary liability. The coverage protects a company when an employee doesn’t get enrolled in a healthcare plan, receives erroneous or misleading benefits advice, or doesn’t have beneficiary designation changed when requested. With these areas, there can be lengthy and expensive litigation involved. An insurance policy can help provide the financial defenses necessary to keep a company from going under.