Are your clients fully protected from their liability exposures? Deciding on purchasing a policy involves many considerations and depends on various factors, such as the costs and benefits of the policy. However, when fiduciary liability puts personal and professional assets at risk, it is easily viewed as a worthwhile investment. Fiduciary liability insurance covers breach of fiduciary duties claims.
Your clients are legally bound to act in the interest of their participants. Even the slightest breach may lead to severe litigation and government fines. Litigation can also be costly when the claim is unfounded. In any case, your clients will need Fiduciary liability insurance to protect company assets.
The Ins and Outs of Fiduciary Liability
With so much at stake, fiduciaries must be extremely cautious of their potential liability and follow fiduciary best practices. These include documenting the process, diversifying investments, avoiding conflicts of interest, monitoring investment performance, and precisely following all document terms.
Under The Employee Retirement Income Security Act of 1974 (ERISA), there is a fiduciary duty when administering, managing, or controlling plan assets. Businesses that sponsor a retirement plan for employees or those involved with the plan’s administration could be held liable in regard to fiduciary duty. A company must have the right level of coverage for their benefits plans.
Why Fiduciary Liability Insurance is so Important
Those who offer employee benefits are inherently at risk for legal liability in regard to errors and omissions in these plans. Also, those with authority over managing and controlling the employee benefit plan can be exposed to many claims. Fiduciary Liability claims can commonly occur by:
- Failure to maintain proper company health insurance plans.
- Misappropriate payroll funds.
- Denial or change in benefits.
- Conflicts of interest.
- Incautious investment decisions.
- Benefits plan administration errors.
Staffing firms purchase a Fiduciary Liability policy to protect themselves against potential claims. Fiduciary Liability insurance is specifically designed to protect a company and its specified fiduciaries from claims arising out of these types of instances. Since the Affordable Care Act was established, many staffing firms have now implemented partially self-funded plans and are open to fiduciary liability exposure.
Your clients would greatly benefit from fiduciary protection to safeguard from legal actions associated with bodily injury and/or property damage. For the insured’s contract employees (temporary placements), an occurrence-based policy is available to extend coverage to the insured for damage that a contracted employee has caused while on assignment.
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 (877) 256-0468 to speak with one of our representatives.