Fiduciary Liability Insurance

Fiduciary Liability Insurance

By increasing your awareness of Fiduciary exposures and important features of Fiduciary Liability Insurance, the Brown Insurance Group can assist you in securing the broadest protection for the results you desire.

On Labor Day in 1974, along with the signing of the Employee Retirement Income Security Act (ERISA) so began a new era of employer responsibility with prescribed legal remedies in the event of employer negligence. With only limited regulatory exemptions, ERISA applies to any fund, plan, or program providing retirement benefits, income deferral, medical/life insurance, or other benefits for employees (Note - this is considerably broader than just pension and/or profit sharing plans).

Essentially, ERISA prohibits any self-benefiting transactions or clear “conflict of interest” implications; requires that “fiduciaries” demonstrate “reasonably prudent” behavior in managing benefit plans; requirement of diversification of benefit plan assets; and that guidance for benefit plans be provided by a “plan document”. There are broadly defined legal penalties for “fiduciaries” (generally includes an organization’s Director of Human Resources, Chief Financial Officer, and President, among others) who breach provisions of conduct specified by ERISA. It is well understood fiduciaries expose personal assets in exchange for the difficult benefits decision-making process, and that corporate indemnification provisions may not be used to satisfy this personal liability.

Although carefully written corporate bylaws cannot avert this personal exposure, the purchase of Fiduciary Liability coverage is certainly allowed. Consider the Brown Insurance Group for guidance as you navigate the area of Fiduciary Liability coverage for your organization's fiduciaries and persons of interest. By increasing your awareness of Fiduciary exposures and important features of Fiduciary Liability Insurance, the Brown Insurance Group can assist you in securing the broadest protection for the results you desire.