What Insurance Covers Employee Benefit Plan Mistakes?

Fiduciary liability insurance is generally the coverage line to examine for claims alleging wrongful administration or management of benefit plans. The policy responds only when its insuring agreement, definitions, and covered-cause requirements are satisfied; the line name by itself does not establish that a loss qualifies. Plan mistakes can be clerical or fiduciary. A narrow employee-benefits liability extension may not cover decisions about investments or the plan’s design.

Common exceptions include exclusions, sublimits, deductibles, and conditions specific to the insured property, claimant, or event. Different forms can treat closely related losses differently, so a quote summary or certificate is not enough to establish the complete terms. The policy and endorsements control.

For this exposure, check covered plans and fiduciaries, benefits exclusions, defense costs, and reporting terms. Ask the broker to point to the applicable grant and exception in the actual form, and verify who is insured, the policy period, limits, and claim-notice steps.