Fiduciary Liability Insurance was developed to protect those individuals who administer employee benefits plans that are subject to ERISA, the federal law which governs those plans. An individual who is deemed to be a Fiduciary is subject to Personal Liability (meaning their personal assets) in the performance of their duties.
Types of Employee Benefit Plans subject to ERISA:
Defined Benefit/Contribution Plans
Who can Sue for Breach of Duty?
Participants (Employees) or Beneficiaries
US Department of Labor
Types Of Actions that Lead to Claims:
False of Misleading Statements
Diversification or Failure to
Non-Compliance with Plan Documents
Errors in the Administration of Plans
Selection of or Failure to Monitor Outside Investment Manager