It sounds like a fancy insurance term, and while it takes sound strategy and insight to implement, fiduciary liability insurance is straightforward, smart business. By definition, and this is excerpted directly from the website from a partner of ours, The Hartford,
"Fiduciary liability insurance (and management liability insurance) is targeted at protecting businesses’ and employers’ assets against fiduciary-related claims of mismanagement of a company’s employee benefit plans. It is not required by the Employee Retirement Income Security Act (ERISA) or any federal statute. If a claim is made against the policyholder of this insurance, it covers the legal expenses of defending against the claim, as well as the financial losses the plan may have incurred due to errors, omissions or breach of fiduciary duty."
"If you presently have or intend to have employee benefit plans of any kind, including pensions, then you'll want fiduciary liability insurance in place as part of your overall strategic plan," says Joe Convertino, Jr., President at CH Insurance. "It's an important part of a sound recommendation we would make to any of our client partners as we navigate those elements important to your overall insurance portfolio."
You can visit here to see some specific scenarios where fiduciary liability would apply.
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