October 15, 2015
Pre-claim investigation coverage is a relatively new but important coverage to be aware of, and you should check to see if your policy has it. This coverage can cover legal fees incurred during a Department of Labor (DOL) or Pension Benefit Guaranty Corporation (PBGC) investigation, rather than coverage only being triggered after the investigation is complete.
Segal Select Insurance Services, Inc., the insurance brokerage member of The Segal Group, recently received a copy of a DOL closure letter for one of its clients. Segal Select’s broker called the plan’s legal counsel and asked if they were aware that the plan’s fiduciary policy contained pre-claim investigation coverage. The counsel was not but, based upon Segal Select’s recommendation, contacted the insurance carrier and submitted a claim for its legal bills. Despite the unusual timing (the legal counsel did not submit the claim until after the letter was received), the carrier still paid over $20,000 in legal fees. In this case, the late timing did not hurt the client, but that may not always be the case.
Segal Select recommends you check your fiduciary liability policy for this coverage, and make sure both the plan administrator and legal counsel know of its existence. This is just one example of the broad scope of coverage that fiduciary liability insurance policy can now provide.
If you have any questions regarding this coverage, please contact your Segal Select consultant or send us a note.
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