Under the Employee Retirement Income Security Act of 1974 (ERISA) law, directors, officers, trustees and other fiduciaries can be held personally liable for the decisions they make when managing plans or advising plan participants.

Many fiduciaries and plan administrators are under the incorrect impression that they are adequately covered by purchasing GL, D&O and EBL policies and/or an ERISA bond. In fact, these policies usually do not cover the unique exposures facing private companies, who sponsor fiduciary plans, and the individuals who manage and administer them.

Plan fiduciaries can honestly, but mistakenly commit errors and violations of ERISA law. Unfortunately, lawsuits can be based upon an honest mistake. Your Fiduciary Liability insurance is able to protect you from violations or perceived violations of this complex law.

Many fiduciaries think that using a third party for plan management removes them from any responsibility. Although using an outside investment expert and plan administrator may be a good risk management tool, it does not completely mitigate your fiduciary liability exposures.