What is fiduciary liability insurance?
Fiduciary liability insurance protects plans and trustees against lawsuits alleging a breach of fiduciary duty as well as administrative errors or omissions. This insurance pays for defense costs, settlements and judgments. An additional waiver of recourse rider, which must be paid for with non-plan assets, ensures that trustees' personal assets are also protected from any losses.
What are fidelity bonds?
ERISA requires that every fiduciary of an employee benefit plan and every person who handles plan funds be bonded. These bonds cover the plan from loss of assets due to fraud or dishonesty. Unlike fiduciary liability insurance, fidelity bond coverage is triggered by the discovery of the fraud or dishonesty, rather than a third party demand or lawsuit.
Segal Select Insurance recommends that plans either require that plan vendors (defined as outside agents in the fidelity bond) who handle plan assets provide evidence that they have a current, ERISA-compliant bond or else purchase this broader coverage themselves.
What is employment practice liability insurance (EPLI)?
Numerous federal and state laws address and identify illegal employment practices, such as sexual, religious or age-based discrimination. Employment practice litigation is widespread. If the case is not properly handled, the cost of defense, along with settlements from damages, can be substantial. EPLI is designed to cover the defense, settlement and judgment costs.
What is cyber liability insurance?
Most states have enacted laws to protect individual personal information. If this personal information is not properly protected, and accordingly breached or improperly disclosed, mandatory reporting requirements are specified. Cyber liability insurance provides limits of liability that can help pay the cost of notification, provide coverage for other associated costs and provide liability insurance protection should the plan or its fiduciaries get sued.
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