ERISA makes it personal.
Fiduciary liability covers claims arising from the administration of employee benefit plans — where liability attaches to individuals, not just the company.
What Fiduciary actually does
Under ERISA, anyone with discretionary authority over an employee benefit plan is a fiduciary, and fiduciaries are personally liable for breaches of duty. That includes the founder who picked the 401(k) provider and the head of people who selected the fund lineup. Corporate indemnification does not fully solve it, and D&O typically excludes ERISA claims.
Claims usually allege imprudent investment selection, excessive fees, failure to monitor a service provider, or errors in eligibility and enrollment. Fee litigation has moved decisively down-market from large plans to plans in the tens of millions and below.
It is inexpensive and is almost always added to a management liability package alongside D&O and EPLI. The ERISA fidelity bond, which is a separate statutory requirement covering plan asset theft, is not the same thing — most companies need both.
Buy it when
- You launched a 401(k)
- You changed recordkeepers or fund lineups
- Plan assets crossed a few million dollars
- You moved to a self-funded or level-funded health plan
What it covers
Grants vary by carrier and form. These are the components we look for when we place it.
Breach of fiduciary duty
Claims of imprudent selection or monitoring of plan investments and service providers.
Excessive fee claims
Allegations that plan participants paid unreasonable recordkeeping or investment fees.
Administrative errors
Enrollment, eligibility, and communication errors that cause participant loss.
Regulatory proceedings
Defense of DOL and IRS investigations relating to plan administration, including voluntary correction programs.
Settlor and plan-design defense
Coverage for defense of decisions to establish, amend, or terminate a plan.
What it doesn't cover
We put this in front of you at binding — the only moment you can still do something about it.
- Benefits actually due under the plan
- Failure to fund the plan
- Deliberate fraud and dishonesty
- Bodily injury and property damage
- Claims covered by the required ERISA fidelity bond
Three ways this policy earns its premium
Composite scenarios drawn from how these losses typically develop. Illustrative, not case files.
A participant class action over fund fees
Former employees allege the plan's default funds carried unreasonable expense ratios and that the committee never benchmarked them. Defense costs dominate the loss.
An eligibility error excludes contractors-turned-employees
A misconfigured payroll integration omits a cohort from enrollment for eleven months. Correction costs and a DOL inquiry follow.
What limit is normal
Ranges we commonly see for technology companies. Your contracts and exposure decide the answer — this is where the conversation starts, not where it ends.
| Stage | Typical | |
|---|---|---|
| Plan under $10M | $1M | Typically added to a management liability package for a modest premium. |
| Plan $10M – $50M | $1M – $3M | Consider a dedicated limit as participant counts grow. |
| Plan $50M+ | $5M+ | Standalone placement with attention to settlor and mass-action wording. |
Companies that need this
- Any company sponsoring a 401(k) or similar plan
- Companies with self-funded or level-funded health plans
- Companies whose executives sit on a benefits committee
What we need to quote
- Plan types, participant counts, and total plan assets
- Recordkeeper and investment advisor names
- Whether a benefits committee exists and how often it meets
- Copy of the current ERISA fidelity bond
- Any prior DOL or IRS inquiries
Most of this is collected once in the Atlas submission and reused across the markets we approach.
Start a submissionSituations that put this policy on your desk
Fiduciary, answered
No. The bond is a statutory requirement covering theft of plan assets. Fiduciary liability covers claims of mismanagement against the people running the plan. Most companies need both.
They may be a 3(38) or 3(21) fiduciary for investment selection, which reduces but does not eliminate your exposure. You remain responsible for selecting and monitoring them.
Find out what fiduciary costs for your company.
Tell us about the business once. A broker reviews it the same business day and comes back with a plan and a timeline.