Does Fiduciary Liability Cover Excessive Fee Lawsuits?

DOL identifies paying only reasonable plan expenses as a fiduciary responsibility. A claim alleging that 401(k) plan fees were unreasonable can therefore allege a fiduciary breach. Travelers describes a hypothetical 401(k) suit alleging excessive recordkeeping and investment fees, but the company’s example does not establish how another insurer—or even another policy version—would respond.

Check whether the quoted form covers defense and settlements for the pleaded allegations, how defense costs reduce the limit, and whether the policy excludes or limits restitution, fees, disgorgement, or amounts characterized as benefits. Review the insured-person and plan definitions and any prior-knowledge or prior-proceeding exclusions as well. Preserve fee studies, service-provider comparisons, committee minutes, and notices; insurance does not replace a prudent documented selection and monitoring process.