Fiduciary Liability

Fiduciary Liability insurance is a critical, often overlooked coverage for small and low mid- market businesses that offer employee benefit plans. Whether your clients manage a 401(k), health benefits, or pension plans, they are considered fiduciaries under ERISA—and that comes with serious legal responsibilities. A simple administrative error, miscommunication about plan options, or failure to monitor third-party providers can result in lawsuits from employees, former employees, or regulatory agencies. Fiduciary Liability insurance provides protection for these risks, covering legal defense costs, settlements, and penalties related to breaches of fiduciary duty.

For brokers, it’s important to recognize that many private companies assume their General Liability or Directors & Officers (D&O) Liability coverage will respond to benefit plan-related claims—but they typically won’t. Fiduciary exposures are unique and increasing, especially as employee awareness of benefit rights grows and regulatory scrutiny intensifies. Even small errors—like miscalculating benefits or failing to enroll someone properly—can trigger costly disputes. By educating clients on these exposures and recommending Fiduciary Liability coverage, you’re not only closing a serious gap in protection, but also reinforcing your role as a trusted, forward-looking advisor.