A fiduciary’s liability is one of the most misunderstood areas of exposure for those involved with retirement plans. If your company is a small company, it is particularly important to consider the fact that as a fiduciary, it is your responsibility to select advisors and investments, hire the plan’s record keeper, minimize expenses, and carefully follow plan documents. When you are exposed to liability as a fiduciary, you can be held personally liable for breach of fiduciary duties. Lawsuits can expose fiduciaries to numerous claims by plan participants and beneficiaries. These exposures include claims for failing to make timely contributions, not following plan documents, failing to prudently invest to meet employee expectations, paying excessive fees, and failing to respond to requests for rollovers, distributions, and investment changes.
It’s alarming how many fiduciaries do not understand the extraordinary way in which their personal assets are exposed. Thousands of ERISA lawsuits are filed each year, and with staggering defense costs required to defend those suits. Fiduciary liability insurance is necessary because while the ERISA bond covers the plan for any loss by theft, it does not cover fiduciaries for lawsuits brought by third parties. Fiduciary liability insurance protects you and your personal assets from the substantial legal costs required to defend against fiduciary liability claims, and provides indemnity in connection with settlements and judgments. Protect yourself today with fiduciary liability insurance.
So who should you reach out to if you would like to purchase fiduciary liability insurance?
Colonial Surety Company is a U.S. Treasury listed direct and digital insurance company, providing ERISA fidelity bonds packaged with fiduciary liability insurance and cyber liability insurance. Colonial is the leading direct writer of ERISA related products, and is rated “A Excellent” by A.M. Best. Learn more about purchasing an ERISA fidelity bond package.