Fiduciary Liability Insurance

Fiduciary Liability Insurance protects plan sponsors and other fiduciaries who offer and manage a pension or retirement plan against claims alleging mismanagement of the plan.

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What is Fiduciary Liability Insurance?

When a business offers a pension plan, 401(k), or other ERISA-governed retirement plan, the company and certain individuals automatically become fiduciaries under ERISA law. Fiduciary Liability Insurance helps protect those fiduciaries from personal and corporate financial loss if they are accused of errors or breaches of duty in administering the plan.

What it covers

Fiduciary Liability Insurance typically covers claims alleging:

Breach of fiduciary duty under ERISA
Errors or omissions in plan administration
Improper investment selection or monitoring
Failure to follow plan documents
Miscommunication of benefits
Late or incorrect contributions
Regulatory actions or investigations

Why plan sponsors need it?

An ERISA Fidelity Bond protects the retirement plan itself, but Fiduciary Liability Insurance protects the plan sponsor and fiduciaries by covering claims and legal defense expenses. This coverage is essential because fiduciary liability cannot be transferred to a third party, even when a pension professional or Third-Party Administrator is engaged.

Colonial Surety Company uniquely bundles Fiduciary Liability Insurance with the required ERISA Fidelity Bond and includes $50,000 of complimentary Cyber Liability Insurance. This added protection helps safeguard both the retirement plan and the business.

The Department of Labor has made clear that maintaining a cyber response plan for a retirement plan is itself a fiduciary duty. Our bundled approach helps support this requirement by addressing both fiduciary risk and cyber exposure.

To provide long-term value and stability, we offer 1-, 2-, and 3-year protection packages with locked-in bond pricing, ensuring consistent costs as plan assets grow.

*read the published guidance from the DOL titled “Cybersecurity Program Best Practices” here.

Already have your ERISA Bond?

No problem: now you can add Fiduciary Liability and Cyber Liability to complete your coverage. Remember, our Cyber Liability Insurance for plan sponsors covers the retirement plan, as well as the company.

Fiduciary Liability Insurance is now offered as a standalone product with 50k of Cyber Liability Insurance.

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