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Fiduciary liability

Insurance for retirement plan sponsors and fiduciaries for personal liability claims and litigation costs associated with alleged mismanagement of plans

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Protection

Covers organizations for alleged breaches of fiduciary duties and errors and omissions in the administration of their benefit plan(s)

Flexibility

Shields any person or entity who exercises discretionary control over plan assets via broad insured persons language

Security

Safeguards corporate balance sheets against the costs of defending and resolving pension and benefit litigation

In order to administer pension plans diligently, plan fiduciaries often have complex and challenging choices to make. Under the Federal Pension Benefits Standards Act, 1985 and similar provincial laws, plan sponsors have a duty to act solely in the interest of plan participants and not the company. They must be prudent in making plan decisions, diversifying plan investments, and following sometimes very complex plan documents.

Errors or poor decisions around design, financing, administration, plan termination, or vendor management can have substantial implications for plan fiduciaries, opening the door to potential litigation.

Fiduciary liability insurance provides protection to plan sponsors and fiduciaries against both personal liability and the costs associated with defending lawsuits alleging mismanagement of plans and their assets. This coverage is a robust risk mitigation tool for any corporation managing employee retirement plans, and should form an integral part of an organization’s governance.

FAQs

A fiduciary liability policy typically covers defence costs, damages, judgments, and settlements resulting from:

  • Fiduciary’s breach of duty imposed by statute or common law
  • Negligence, errors, or omissions in the administration of the plan(s)

A fiduciary liability policy does not protect against contractual liability and therefore cannot be used to guarantee the plan’s obligation to pay any benefits due.

A fiduciary liability policy typically insures the sponsor organization, the benefit plans — any benefit program sponsored, operated, maintained, or administered by the sponsor organization for the benefit of the employees — and plan fiduciaries who are directors, officers, or employees of the sponsor of the plan.

Why Marsh

The Marsh FINPRO practice has specialized, long-standing industry expertise to help you identify and manage your company’s risks, as well as protect your company from increasing legal and regulatory exposures. As comprehensive risk advisors, we assist our clients in uncovering any red flags in their fiduciary controls and making changes to help remedy any deficiencies. We advise clients on their fiduciary insurance needs by building well-designed fiduciary liability programs, from limit assessment to carrier selection, to help mitigate litigation exposure. Our best-in-class claims advocates are there to help clients resolve claims from the onset.

Enhance your risk mitigation strategy with fiduciary insurance

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