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What Is Fiduciary Liability Insurance?

Fiduciary liability insurance can help with covered claims that your business or its people mishandled employee benefit plan responsibilities.

What Does Fiduciary Liability Insurance Cover?

Fiduciary liability insurance addresses covered claims alleging breaches of duties in managing employee benefit plans. 5,1

People, Organizations and Plans

Check which people, sponsoring organizations and benefit plans are insured under the quote. 2

Describe what each person does for the plan; a job title alone does not determine fiduciary status. 2

Administration and Fiduciary Responsibilities

Plan administration includes enrollment, records and communications. An error in an enrollment record isn't the same allegation as a breach of duty over investment decisions. A fiduciary proposal should explain how it treats both administrative mistakes and alleged fiduciary breaches. 2

TopicQuestion to resolve in the quote
Plan and sponsorAre the relevant plan and sponsoring organization included?
People with plan responsibilitiesWhich people fall within the insured definitions?
Enrollment, records and communicationsHow are administrative errors treated?
Alleged fiduciary breachWhich duties and claims does the proposed protection address?
2 2

Who Needs Fiduciary Liability Insurance?

Consider fiduciary liability if your business sponsors employee benefit plans and your people make decisions or handle administration for them. 4

Coverage Examples

These are examples, not coverage guarantees. Your policy terms and the facts of the claim determine what is covered.

What happened

Employees Challenge Plan Decisions

Employees allege that the people managing their benefit plan mishandled its investments.

How coverage may help

Fiduciary liability may cover defense and covered losses from a breach-of-duty claim. The plan, sponsoring organization and people involved need to be insured. 5,1,2,4

What happened

An Enrollment Mistake Leaves a Gap

An employee says an enrollment mistake left them without an expected benefit.

How coverage may help

Benefits-administration coverage may address liability for the mistake. That doesn't mean the policy will pay benefits the plan already owes. 5,1,2

How Do You Compare Coverage and Costs?

Defense Expenses and the Limit

Compare how defense expenses affect the liability limit and what amount the business must bear through a retention. 2,4

Notice and Consent

Confirm the process for notifying the insurer and obtaining consent before committing to defense expenses or a settlement. 3

What Exclusions and Conditions Should You Check?

Claims, Earlier Problems and Reporting

Ask when a claim must be made and reported and how prior proceedings, known problems and earlier notices affect coverage. 2,3

Benefits Owed and Liability Claims

Ask how the policy distinguishes a covered liability claim from the payment of benefits the plan owes. 2

Misconduct Exclusions

Review how exclusions for intentional misconduct apply and whether defense expenses are treated differently. 2

How Does It Compare With Related Coverage?

A fidelity bond for dishonest handling of plan assets and liability insurance for fiduciary-breach claims address different exposures. 1

What Do You Need for a Quote?

Prepare a list of benefit plans, plan types and assets, participant information, investment-decision arrangements and past claims or known disputes. 4

Key Terms in Plain English

Fiduciary Liability

Protection for covered allegations about duties in managing employee benefit plans. 5,1

Fidelity Bond

Protection for dishonest handling of plan assets, a different exposure from a fiduciary-breach claim. 1

A Policy Example to Compare

See Corgi's guide for an example of one provider's coverage terms and optional extensions.

Frequently Asked Questions

Is Fiduciary Liability the Same as a Fidelity Bond?

No. Fiduciary liability addresses covered breach-of-duty claims. A fidelity bond protects plan assets against dishonest handling. 1

Does the Policy Pay Benefits That the Plan Owes?

A liability claim and benefits already owed by the plan are treated differently. Confirm how the policy handles the payment at issue. 2

Can Fiduciary Liability Insurance Address Benefit Enrollment Errors?

Ask how the policy handles errors in enrollment, benefit records and communications. Those administrative tasks need to be checked alongside protection for alleged breaches of fiduciary duties. 2

Who Is Insured Under a Fiduciary Liability Policy?

Check the definitions for insured people, the sponsoring organization and the benefit plans. The quote should identify which of those parties receive protection. 2

Which Insurance Providers Offer Fiduciary liability?

Sources

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  2. Fiduciary Liability. Travelers Casualty and Surety Company of America; II.D,J–L pp.2–3; II.A p.1; II.V p.5; Header p.1; II.M p.3; I p.1; III.A.6–8 pp.5–6; II.M.2 p.3; III.B.1 p.6. Version: FRI-3001 Ed. 01-09. Accessed 2026-09-16.
  3. Liability General Terms, Conditions and Limitations. Travelers Casualty and Surety Company of America; III.F–G p.6. Version: LIA-3001 Ed. 01-09. Accessed 2026-09-16.
  4. Fiduciary Liability Coverage Application. Travelers Casualty and Surety Company of America; Requested Insurance Terms p.2; General and Plan Information pp.1–2; Loss Information p.2. Version: FRI-N-14100 Ed. 09-22. Accessed 2026-09-16.
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Updated .

Sources checked .

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