When you offer benefit plans like health insurance and 401(k) plans to employees, your company is a ‘fiduciary’ because your company is managing or administering some of your employees’ assets.

If there are errors made managing your benefits plan, you could face lawsuits related to the breach of your fiduciary duty to properly manage your employees’ assets. A fiduciary liability policy can help cover the costs of claims related to mismanaging your employee’s assets or negligence related to administering your benefits plans.

Here are a few questions to ask yourself to help determine if you need fiduciary liability coverage:

• Do you offer your employees medical, dental, or vision insurance?
• Do you offer your employees a 401(k) retirement plan?
• Do you offer your employees a stock option plan?

If you answered yes to any of these questions, you need Fiduciary liability coverage.

Some of the claims that fiduciary liability policies cover include:

• Errors and omissions in the benefit plan’s administration, including mistakes that affect employees’ ability to get coverage on time, or even mistakes that result in loss of coverage for employees.
• Inconsistencies between the benefits plan documents, and how they were administered by your company.
• Poor investment decisions and advice to employees.

If the claims against your company are found to be unintentional, a fiduciary liability policy will generally cover the cost of legal defense and associated settlements.