Who in Massachusetts Needs Fiduciary Liability Insurance?
Fiduciary liability insurance is often purchased by Massachusetts organizations that oversee employee benefits. In an employee benefits citation, the insurance is typically purchased in case the benefits are mismanaged by someone. Mismanaging multiple employees’ benefits can have understandably large costs. When purchased for risks related to employee benefits, the insurance may protect the employer and/or individuals who oversee the benefits.
In addition to employers who provide benefits, anyone else who has a fiduciary responsibility might want fiduciary liability insurance. Trustees, advisors and others who have legal fiduciary responsibilities should talk with an insurance agent who specializes in this type of coverage. A specialized agent will be able to review a fiduciary’s risk exposure and help evaluate whether purchasing this insurance makes sense.
Does Employee Benefits Liability Insurance Cover Mistakes Made When Managing Benefits?
Employee benefits liability insurance normally does cover a range of potential mistakes that can be made when managing employee benefits. These policies commonly exclude situations where fiduciaries provide advice, however.
If fiduciaries offer investment or retirement advice, it’s generally wise to also carry fiduciary liability coverage. Fiduciary liability policies typically do cover situations where fiduciaries are accused of making an incorrect recommendation.
Who Can Sue a Fiduciary?
A fiduciary may face a lawsuit from almost anyone, but many fiduciary lawsuits are filed by a few main groups. Employees, the Department of Labor and the Pension Benefit Guarantee Corporation are some of the more likely groups to sue a fiduciary whom they believe has acted incorrectly.
Fiduciary liability policies might cover suits by any of these groups, depending on the specifics of a policy.