Do you believe you need fiduciary liability overage? If you are an owner or officer who makes decisions about managing your company’s 401(k) plan or qualified pension, you are likely considered a fiduciary—so the answer is emphatically yes! That’s because as a fiduciary, by law you can be held personally liable for losses to your company’s plans if they are caused by your errors, omissions, or a breach in performance of your fiduciary duties. At iSure Insurance Brokers, we specialize in advising our clients about this risk and protecting their personal assets from these claims.
Claims can arise from multiple sources
Claims of this nature can be brought either individually or as a class action by plan participants or their estates, the Department of Labor, and the Pension Benefit Guaranty Corporation, who may charge you (as well as the company and even the plan itself) for:
Providing improper advice or disclosure
Inappropriate selection of advisors or service providers
Irresponsible investment decisions
Lack of investment diversity
Negligence in plan administration
Conflict of interest pertaining to investments
Misrepresentation of benefits
Belief that a higher return could have been achieved under different investment decisions
Coverage provides considerable protection
A fiduciary liability policy will pay for the court costs, legal fees, judgments, and penalties related to defense of a claim. This is key, because other liability policies such as directors and officers and employment liability exclude many issues of fiduciary responsibility, particularly for claims charging reckless investment of funds.
An industry analyst puts the average cost for defense of a fiduciary liability lawsuit at $365,000, and found the average settlement is nearly $1 million! With sobering numbers like these, it’s clear to see why it’s just good business sense for companies in the Greater Miami Area to obtain protection for this risk. Your iSure advisor can work closely with you to determine how a fiduciary liability plan can be part of your comprehensive approach to risk management.