Fiduciary Liability Insurance
Risk Management is a crucial aspect of keeping your business, whether small or large, solvent and viable in our litigious society. This practice involves identifying threats to the business, physical or financial, and applying resources to mitigate damages. On-going monitoring of potential perils is vital, and rapid corrections of problems will ensure that your business will survive and thrive. We will assist in solutions that will bring peace of mind, so you can stay in the business of doing business.
The 1974 Employee Retirement Income Security Act, or ERISA, holds administrators of employee benefit plans, or fiduciaries, responsible for asset mismanagement. Employee benefits include pensions, profit-sharing, Employee Stock Ownership Plans (ESOP), and other non-wage compensation programs. Fiduciary Liability Insurance is similar to other policies such as Employment Practices Liability (EPL) and Directors’ and Officers’ (D & O) policies. However, it additionally defends against irregularities in the administration of benefits. EPL and D & O leave surety gaps in circumstances in which fiduciary liability is an issue.
The fiduciary is the person or persons who hold legal and ethical trust with other parties. The fiduciary’s role is to act as a prudent steward of employees’ resources and is obligated to work with great care and prudence when managing these funds. They are accountable to the beneficiaries of the plans and programs entrusted to them. A breach of this trust is unlawful, and current and past plan participants are legally entitled to sue any entities sponsoring health and welfare plans that have been potentially impacted by the fiduciary’s actions. Even the appearance of impropriety can lead the fiduciary and the company down a path of expensive and time-consuming litigation.
Charges of abrogation of fiduciary responsibility can be costly to all involved. Legal action threatens the company’s financial well-being. Benefits Administrators may be held personally liable for mismanagement of funds. Directors, officers, executives, and managers personally carry risk in a potential lawsuit. Fiduciary Liability Insurance provides financial protection should litigation arise.
Legal action may result after any events involving administrative errors, delays in benefit distribution or transfers, and any changes or reductions in stakeholder benefits, among others. The importance of protecting the fiduciary’s privately-held finances and family assets cannot be overstated.
The Pearson Wallace team will work with you to create a policy aimed at preserving your company’s well-being as you manage ERISA obligations and liability. We will help determine the plan that provides the most effective risk management strategy based upon your corporate structure and overall goals. Comprehensive underwriting helps to shield assets, both personal and corporate; the costs associated with investigations, legal representation, settlement agreements, and judgments can be astronomical. Allow us to help your organization and plan administrators proceed with the peace of mind that comes with protection written for your unique business insurance needs. Our knowledgable experts are prepared to guide you through what can be an arduous process.
Pearson Wallace’s professionals possess unmatched skills in underwriting executives and their companies. Safeguarding assets in the face of potential claims based upon violations of the ERISA statute, allegations of fiduciary mismanagement, and misappropriations of funds is a fundamental Risk Management strategy.