In the world of insurance, there are some policies that get more attention than others. Personal lines of homeownership, commercial property, or business owner policies are some of those that are easily understood. A fiduciary liability policy (FLP), however, is rarely understood despite the significance of the coverage it offers.
With fiduciary insurance, those working administratively to manage employee benefits plans have a means of support in the event the company or individual is sued for their actions. Generally speaking, an employee will file a claim of failure to act or pronounce the actions taken as damaging and creating a loss. Anyone with involvement in administering the benefits, such a payroll clerks, human resource managers, investment agents, or high-ranking corporate executives can be held liable in these scenarios. This makes having a fiduciary liability policy a crucial component of a comprehensive risk assessment and management plan.
Regulatory actions and litigation for claims can be time-consuming, costly, and bad for business. Therefore your plan should address all areas of exposure as well as individuals associated with your benefits plan. This should include:
- Coverage for all employee benefit plans sponsored by the company for all employees
- Coverage for virtually all of the company’s employees and affiliates
Address these primary elements with your broker to determine if your fiduciary liability policy offers enough coverage.