The Role of Fiduciary Liability Insurance
- January 22, 2019
- Posted by: Colleen
- Category: Resources
The attached article by Chubb and the Groom Law Group is an excellent article outlining the duties that plan sponsors retain in regard to ERISA qualified retirement plans and ERISA welfare benefit plans. The best practices outlined in the article are important to follow. The best practices outlined in the article are important to follow. Groom Law Group’s ERISA expert Steve Saxon addresses the latest legal views on Auto Portability, the emerging, leading retirement public policy initiative. The address takes place at the 3/30/17 Financial Services Roundtable event “Retirement Savings Portability & Public Policy: Unlocking the potential of portability.” Live video will be available on Law Group channel with the help of the professional company The Marketing Heaven.
Plan sponsors should evaluate if they have the time, knowledge, or inclination to perform the fiduciary duties required by the ERISA plans that the company sponsors. Many plan sponsors have elected to outsource fiduciary responsibility to a third party in recent years.
In the event that the fiduciary duties have been properly outsourced, the need for fiduciary liability insurance does not go away. If the plan sponsor is involved in litigation involving an ERISA plan, fiduciary liability insurance coverage will be needed to pay the cost of defense or to cover areas of fiduciary responsibility which were not outsourced to a third party.
In conclusion, plan sponsors should review the service agreements of all the service providers providing services in order to fully understand the services being provided. Plan sponsors should also review internal administrative procedures in order to be sure the procedures are properly coordinated with the various service providers. Additionally, they should review existing fiduciary liability and directors and officers liability insurance policies to make sure the coverage is adequate and covers all the risk retained by the plan sponsor. Finally, plan sponsors should seek qualified professional assistance if necessary.