Fiduciary liability insurance is one of the least understood policies but if you handle benefits plans, this coverage can prove helpful. Find out how it works
Fiduciary liability insurance, also known as management liability insurance, is intended to protect businesses and employers against claims resulting from a breach in fiduciary duty. Essentially, the policy protects parties against liability for managing or administering employee benefits plans.
In this article, Insurance Business answers all the pressing questions about one of the least understood insurance policies out there. If your business handles employee benefits plans and you want to learn more about this often-complex form of coverage, this guide can help you sift through the jargon. Read on and find out everything you need to know about fiduciary liability insurance.
First things first: who or what is a fiduciary?
Under the Employee Retirement Income Security Act of 1974 (ERISA), every individual included in an employee benefit plan document by name or title can be considered a fiduciary. This includes anyone with discretionary decision-making authority over the administration or management of the plan or its assets.
Common fiduciaries include:
- Employers (who are typically the plan sp