Running a staffing agency isn’t exactly easy. While having directors and officers (D&O) insurance will assist with running a staffing agency, you might need to add fiduciary liability to your staffing insurance coverage. D&O insurance generally doesn’t cover what fiduciary liability does. But what exactly is fiduciary liability insurance?
A subset of management liability insurance, this type of coverage is essential for when an employee’s benefits plan is mismanaged. Unfortunately, mistakes can happen. And on top of that, not everyone is trustworthy. While you may not think that it can happen your your agency, it’s important to always be prepared for the worst case scenario.
The Gallagher Global Management Liability Team found a rise in claims regarding fiduciary liability regarding excessive fees for defined contribution plans. In 2017, there were over 30 cases involving extra fees across the country. None of them should have happened. The rise in claims is drastic; for example, there’s been 80 total lawsuits filed in the past decade. That means almost half of them were recorded in the last few years.
Considering the rise in Employee Retirement Income Security Act (ERISA) claims across the country in recent years, purchasing staffing insurance with extra coverage could mean the difference between your business flourishing or shuttering its doors.
Trying to cut corners to save money isn’t helpful; what do you do when you’ve run into a problem? That’s why every staffing agency should have fiduciary liability on their D&O insurance policy. If you’re wondering what the benefits of fiduciary liability can be, this blog is for you.
How Fiduciary Liability Insurance Works
When your staffing agency needs to be protected, this type of coverage is there to cover all company assets and individuals involved, according to Investopedia. That means when a lawsuit happens, the policyholder is promptly protected from any financial fallout.
There isn’t just lawsuits to worry about. There’s also the fact that the lawsuit takes up time. So whatever legal expenses are acquired, the policyholder is not liable when they have this form of staffing insurance in place. In short, this policy comes in handy to defend who bought it, and not utilizing it properly can mean the end of an entire company.
You’ll need this coverage in the case of poor or negligent investment practices, failure to offer appropriate investment options, charging fees that seem unreasonable or whatever action is deemed unproductive for whoever is included on that particular plan.
Why This Coverage Matters
This coverage is essential to the duties of a staffing agency because without it, employers can be found liable for human error and thievery. And the thing is, most employers are in fact lacking this crucial piece of coverage. Many think that their errors and omissions (E&O) insurance will do the job, but this coverage doesn’t cover when an employee is involved. If you have an ERISA fidelity bond, that’s not fit to cover this issue either; getting comprehensive staffing insurance is vital.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (800) 245-9653 to speak with one of our representatives.