The Risks From ERISA
There a growing risks of litigation for those responsible for fiduciary duties. Because of their firsthand knowledge of the situation, the team at Axis Insurance Services, recommends a strong fiduciary liability policy to help guard against the exposures that dealing with employee benefit or pension plans can bring.
What is ERISA?
Through the Employee Retirement Incomes Security Act of 1974 (ERISA), fiduciaries are given strict codes of conduct. The act outlines the duties, responsibilities, and obligation of any fiduciary, and presents the corresponding penalties for failure to do so ethically and legally. Companies that offer the following types of employee benefits are required to adhere to this act or face litigation:
401k retirement plan
If your office or administration fails to act in the best interest of your employee, you may face a claim of negligence. The best risk management approach in this situation is having fiduciary liability insurance. This coverage is designed to protect a business from any claims of mismanagement and the resulting legal liability for their actions as fiduciaries. It covers the legal costs associated with defense against claims that include breach of duty and errors.
Although ERISA does not require a fiduciary policy, your company would be wise to carry the coverage. The losses that stem from a claim can financially cripple your company.