ERISA Bond vs. Fiduciary Insurance: What Is the Difference?

Under DOL’s guidance, an ERISA fidelity bond protects the employee benefit plan against loss caused by fraud or dishonesty by people who handle plan funds or property. Fiduciary liability insurance instead concerns liability arising from alleged fiduciary acts or omissions. The two products can both be relevant to one plan, but they are not equivalents: the insured party, trigger, and covered loss differ.

When reviewing a quote, ask for the actual bond and liability forms. Confirm the bond’s protected plan, handlers, amount, and compliance with any ERISA exception. For the liability policy, check covered plans and people, wrongful-act wording, defense expenses, exclusions, limit, retention, and reporting terms. If someone says one contract satisfies both needs, ask them to point to the specific clauses that provide each protection.