Claims of financial damage caused by mistakes, negligence or mismanagement can come at a company from all directions. Standard errors and omissions (E & O) policies are structured to provide effective protection against claims from customers and other third parties, but what happens when the claimant is an employee?
Risks Exposure from Within
If your company offers programs like pensions, life insurance, savings, stock and/or health plans, the benefits administrator (also known as a fiduciary) is open to claims of mismanagement or negligence. Without the protection of a fiduciary liability policy, a business can face potentially debilitating financial consequences.
A Two-Pronged Approach to Protection
In today’s litigious society lawsuits are rampant, whether the claims are valid or not. A fiduciary liability policy generally pays for legal defense and possible settlements, up to the terms written. Most policies include coverage of claims that fall into two broad categories:
Errors and Omissions: Simple mistakes or oversights can prove costly. One example of an honest error of omission that is sure to spark a liability claim is the failure to follow an employee directive to change the beneficiary of a life insurance plan from an ex-wife to a child.
Fiduciary Liability: Claims of fiduciary liability generally arise from conscious decisions by a plan administrator that result in the failure or poor performance of an employee 401k, pension or stock plan.
Don’t run the risk of devastating out-of-pocket expenses. Protect your company with a fiduciary liability policy.