If you offer employee benefits or a retirement plan, these are important terms to know.
Fiduciary liability policies trigger as a result of claims filed against the management of your plan. For example, the fiduciary (usually the employer) may be liable for things like bad investments or plan choice, not funding the account properly, or offering bad advice.
Fiduciary liability can be purchased as a separate, monoline policy for a nominal fee.
IMPORTANT NOTE: Using a third party administrator is likely not enough to offset an employer's fiduciary liability.
Employee benefits liability policies triggers as a result of claims filed against the administration of your plan. For example, the employer may liable for not adding an employee to the group health plan when they were eligible and the employee suffers an injury or illness.
Employee benefits liability can be added as an endorsement to your general liability policy. This coverage is essential to any employer offering retirement or healthcare benefits.