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What Is Fiduciary Liability Insurance?

Fiduciary liability can protect your company and plan fiduciaries when participants claim mishandling of an employee benefit plan. If you sponsor a retirement or health plan, check who is insured and whether both administration errors and fiduciary-breach claims are addressed.

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What Does Fiduciary Liability Insurance Cover?

A dispute over enrollment records differs from a claim that plan fiduciaries mishandled investments; your quote needs to address the risks your role creates. 2

Fiduciary liability insurance can help your organization respond to 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 the quote insures. 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

TopicAsk the insurer
Plan and sponsorAre your benefit plan and sponsoring organization insured?
People with plan responsibilitiesWhich people fall within the policy’s insured definitions?
Enrollment, records and communicationsHow does the policy treat administration errors?
Alleged fiduciary breachWhich duties and claims does the policy 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

Fiduciary Liability Insurance Coverage Examples

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 Fiduciary Liability Insurance Coverage and Costs?

Defense Expenses and the Limit

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

Notice and Consent

Confirm how and when you must notify the insurer and get consent before committing to defense expenses or a settlement. 3

What Exclusions and Conditions Should You Check in Fiduciary Liability Insurance?

Claims, Earlier Problems and Reporting

Ask when you must make and report a claim 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 benefits your plan owes. 2

Misconduct Exclusions

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

How Does Fiduciary Liability Insurance 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 Fiduciary Liability Insurance Quotes?

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

Fiduciary Liability Insurance: 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

Fiduciary Liability Insurance: A Policy Example to Compare

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

Frequently Asked Questions About Fiduciary Liability Insurance

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

Is an ERISA Bond Required?

ERISA generally requires bonding for people who handle an employee benefit plan’s funds or property, subject to exceptions.

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Is Fiduciary Liability Insurance Required?

ERISA generally does not require fiduciary liability insurance, but it may require a separate bond for people handling plan assets.

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What Is Fiduciary Liability Insurance?

Fiduciary liability insurance covers certain claims alleging mishandling of duties connected with an employee benefit plan.

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Does Fiduciary Liability Cover 401(k) Plans?

Fiduciary liability may cover certain claims involving a 401(k) if the plan and insureds meet the policy definitions.

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Does Fiduciary Liability Cover Benefit Plan Mistakes?

Fiduciary liability may cover negligent benefit-plan administration, but routine corrections or amounts owed by the plan may fall outside coverage.

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Does Fiduciary Liability Cover Breach of Fiduciary Duty?

Fiduciary liability is designed to cover certain claims alleging benefit-plan fiduciary breaches, subject to the policy’s terms.

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Does Fiduciary Liability Cover ERISA Lawsuits?

Fiduciary liability may cover some ERISA lawsuits alleging a covered wrongful act, but not every claim or remedy.

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Does Fiduciary Liability Cover Excessive Fee Lawsuits?

Fiduciary liability may cover an excessive-fee lawsuit alleging imprudent plan management, subject to policy terms and treatment of restitution.

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View all 27 questions

What Coverage Is Related to Fiduciary Liability Insurance?

  • What Are Fidelity Bonds?

    Fidelity coverage can reimburse certain losses when employees steal money or property they handle. If employees manage company funds, customer property or benefit-plan assets, identify each owner and compare the required protection for each interest.

  • What Is Directors and Officers Insurance?

    D&O insurance can help pay covered defense costs and losses from claims against company leaders over management decisions. If your organization has a board or executives, check whether the company itself is insured and whether legal bills reduce the limit.

  • What Is Employment Practices Liability Insurance?

    EPLI can help pay covered defense costs and losses when applicants or workers allege discrimination, harassment, wrongful termination or other workplace wrongdoing. If you employ people, check the claim definition, defense costs and prior acts.

Fiduciary Liability Insurance Guides by State

Which Insurance Providers Offer Fiduciary Liability Insurance?

  • AIG

    AIG Fiduciary Liability Insurance / Fiduciary Edge

  • Alliance Risk

    Alliance Risk arranges fiduciary liability insurance.

  • Amelia Risk

    Amelia Risk arranges fiduciary liability.

  • Aon

    Aon lists fiduciary liability within its global Professional Services Practice for law, accounting and consulting firms; U.S. availability and specific policy terms are not established.

  • Beazley

    Beazley offers fiduciary liability insurance for private organizations through ExecuGuard.

  • Berkshire Hathaway Specialty Insurance

    BHSI lists fiduciary liability within its Executive First Private Company Portfolio’s comprehensive form, alongside D&O, employment-practices, crime and employed-lawyer coverages. The page targets private companies with at least $10 million in revenue; portfolio limits up to $50 million may be shared or separate and are not a fiduciary-specific limit.

  • CFC

    CFC offers fiduciary liability in its US management-liability package for eligible organizations outside California, excluding US publicly traded companies.

  • Chubb

    Chubb offers fiduciary liability insurance.

  • CNA

  • Coalition

    Coalition offers fiduciary liability through its executive-risks product for private and nonprofit US organizations.

  • Corgi

    Corgi lists fiduciary liability in its coverage catalog and package options.

  • Counterpart

    Named Fiduciary Liability product for benefit-plan exposures; law and policy terms govern.

  • Coverdash

    Coverdash lists fiduciary coverage in its coverage hub.

  • Cowbell

    Cowbell offers Zurich Select Plus fiduciary liability for small and medium private companies, available through appointed Zurich E&S wholesalers.

  • Embroker

    Embroker lists fiduciary liability with a quote route.

  • Founder Shield

    Founder Shield lists fiduciary liability among its core coverages.

  • Gallagher

    Gallagher arranges fiduciary liability.

  • Heffernan Insurance Brokers

    Heffernan arranges fiduciary liability.

  • HUB International

    HUB International arranges fiduciary liability insurance.

  • Liberty Mutual

    A group brand spanning personal and commercial insurance businesses; its business unit pages describe small-commercial cover for small businesses and commercial, specialty, surety, and reinsurance solutions for mid-size and large businesses.

  • Lockton

    Lockton arranges fiduciary liability insurance.

  • Markel Insurance

    Markel fiduciary liability

  • Marsh

    Marsh McLennan Agency (MMA), a Marsh business, arranges fiduciary liability insurance.

  • Marsh McLennan Agency

    Business insurance and employee health and benefits, with retirement, wealth, and private-client services also listed for the United States and Canada.

  • Nationwide

    Nationwide Management Liability & Specialty lists fiduciary liability as a distinct commercial-liability product; terms and availability remain quote-specific.

  • Newfront

    Newfront lists fiduciary coverage among its executive-risk brokerage services.

  • Relm Insurance

    Relm lists fiduciary liability for placement through brokers.

  • RiskCube

    RiskCube arranges fiduciary liability insurance for startups.

  • StartupInsurance.ai

    StartupInsurance.ai arranges fiduciary liability insurance for startups.

  • The Baldwin Group

    Listed as fiduciary liability for named commercial-sector audiences.

  • The Hartford

    The Hartford offers fiduciary liability as a management-liability coverage option.

  • THREE by Berkshire Hathaway

    Marketed within THREE’s combined commercial policy; the quote and issued form determine the protection.

  • Travelers

    Travelers offers fiduciary liability insurance.

  • USI Insurance Services

    USI arranges fiduciary liability insurance.

  • Zurich U.S.

    Zurich markets fiduciary liability insurance.

Updated .

Spot, a product of Tools for Enlightenment, publishes this research and works in the commercial insurance market. Editorial policy. To suggest a correction, contact Spot with the page URL and supporting source.

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