Employers who offer investment funds to their employees often see an increase in fiduciary liability claims when the stock market is unstable or dips substantially.
When company stocks dip, employees who face losses may look for someone to blame. This situation, and others, can prompt employees to take an employer to court over “negligent” or “incompetent” plan administration. Often they blame the plan administrator, alleging the administrator’s choices have posted greater losses than those of other funds in the market.
Fiduciary liability coverage is defined as “protection for those who administer pension and welfare funds, profit-sharing and other employee benefit programs against loss for errors and omissions by the administrator.” The need for this coverage was created by the Employee Retirement Income Security Act (ERISA) of 1974, and it is also known as pension trust liability insurance.
Often, claims against employers do not surface for one or two years after the market’s downturn, when people realize the impact on their retirement portfolio. You should be prepared. If you haven’t carried fiduciary liability insurance in the past, now might be the time to get it. This is typically an affordable insurance policy that will see you through tough market times.
We understand what you are worth, we are here to help make sure that full financial recovery takes place whatever happens. Get a complimentary policy review or call us now at 855-888-8070.