What Insurance Covers 401k Lawsuits?
Fiduciary liability insurance covers 401(k) lawsuits against plan fiduciaries; an ERISA fidelity bond covers theft of plan assets, not those lawsuits.
Fiduciary liability insurance is the policy that responds when participants sue the people running your 401(k) plan. Typical allegations are poor investment oversight, excessive fees, inadequate disclosures, or administration errors.
An ERISA fidelity bond is different. It protects the plan's assets if someone handling them steals, and it doesn't pay to defend you against a participant lawsuit. You usually need both.
When you compare fiduciary quotes, check which plans and fiduciaries are covered, whether defense costs erode the limit, how the policy treats claims for benefits owed, and the claim-reporting deadline.
