What Is Fiduciary Liability Insurance?
It is liability coverage for certain claims alleging that a person or organization mishandled duties connected with an employee benefit plan. The policy defines who and which plans are insured.
Fiduciary liability insurance is intended to respond to covered claims alleging a breach of duties while managing an employee benefit plan. ERISA fiduciary status generally follows the functions performed, such as exercising discretion over plan administration or assets; a job title alone does not decide it. ERISA also allows employers, employee organizations, plans, and fiduciaries to buy this insurance, subject to the statute’s terms. DOL’s fiduciary guidance explains the functional role; 29 U.S.C. § 1110 permits specified purchases.
A policy is a contract, not a substitute for performing fiduciary duties or a bond for dishonest handling of plan property. For example, a Travelers specimen defines insured persons, plans, wrongful acts, claims, and loss separately. Check the quote for covered plan types, insured people and entities, claims-made dates, exclusions, defense-cost treatment, and any retention. The specimen is illustrative; another insurer’s wording can differ.
Related Coverage
Providers That List This Coverage
Sources
- Understanding Your Fiduciary Responsibilities Under a Group Health Plan. U.S. Department of Labor, Employee Benefits Security Administration; Who Is a Fiduciary?; What Is the Significance of Being a Fiduciary?; Bonding. Accessed 2026-09-25.
- 29 U.S.C. § 1110: Exculpatory Provisions; Insurance. Office of the Law Revision Counsel, U.S. House of Representatives; 29 U.S.C. § 1110(b)(1)–(3). Accessed 2026-09-25.
- 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; III.A.6–8 pp.5–6; II.M.2 p.3; III.B.1 p.6. Accessed 2026-09-25.
