Being able to offer your employees retirement benefits is an attractive option that can draw top talent to your organization. Managing these accounts, however, can also come with certain risks regarding fiduciary liability. Any business that sponsors compensations to their employees such as health plans, life insurance, disability plans, retirement plans, and other employee benefits plans will benefit from fiduciary liability insurance.
Coverage Against Fiduciary Accusations
Fiduciary liability insurance helps protect business and employer assets against accusations that a fiduciary has mismanaged a company’s employee benefits plan. As referenced at SB One Insurance Agency, these claims can include:
- Negligence or error in administrating a plan
- Misinterpretation of plan documents
- Giving ill-advised or impulsive investment options to plan participants
- Misrepresenting investments
- Mishandling paperwork
- Administering bad advice or instructions to plan participants
The legal costs associated with defending against a breach of duty or claims of error can be costly, and this is where fiduciary liability insurance comes in. These policies help cover these costs so that it doesn’t have to come out of operating expenses or other accounts belonging to the business.
Who Needs Fiduciary Insurance?
Anyone who is managing employee benefits can be sued for mishandling them. While small businesses that don’t offer employee compensation packages won’t benefit from this type of insurance, any company offering these incentives to their staff will find great relief in knowing they have coverage in case anything goes awry.