With the end-of-the-year hustle already around the corner, now is a great time to dust off your company’s ERISA fiduciary liability policy to ensure your plan fiduciaries have robust, comprehensive coverage.  Fiduciary liability policies provide coverage for claims related to the administration and operation of retirement and health and welfare plans.  Unlike D&O coverage, fiduciary liability policies rarely get much attention but can similarly provide significant protection to a company’s Board or other plan fiduciaries.

While renewing a fiduciary liability policy is one of the yearly items that employers often do automatically, it’s essential to know before the renewal what a policy covers—and what it excludes—to identify and address any gaps in protection. A review of a policy, to ensure it provides robust coverage, should consider issues such as whether the policy covers all plan fiduciaries (including a committee) and whether the level of coverage is adequate to cover full liability exposure for issues like statutory taxes/penalties (e.g., IRS penalties for retirement plans, HIPAA violations, ACA coverage, and reporting assessments), pre-claim investigations, audits, regulatory correction program participation, and cybersecurity, to name a few.

Having a robust fiduciary liability policy in place is a crucial element to an employer’s comprehensive benefits program.  And fully understanding the scope of coverage before a claim arises or renewing the policy is a best practice to avoid surprises later.