Fiduciary Liability for Financial Institutions

Fiduciaries of employee benefit plans have a duty to act in the best interests of their plan participants. They may even be held personally liable for the decisions they make. In today’s litigious environment, concerns about a benefit plan can quickly escalate into a lawsuit, which could cost millions of dollars to defend and settle. Chubb developed a variety of fiduciary liability insurance policies, including Asset Management ProtectorSM by Chubb and Executive Protection Portfolio^SM to specifically address the unique exposures faced by plan fiduciaries in financial institutions.

Benefits

• Unparalleled claim expertise – Chubb has four decades of experience in handling fiduciary claims
• Continued financial stability as one of A.M. Best Company’s elite highest-ranking insurers
• Local underwriters and claims examiners with industry and state specific legal expertise
• Covers ERISA and non-ERISA employee benefit plans
• Worldwide coverage to the fullest extent permitted by law
• Access to loss prevention resources

Coverage

• Responds to allegations including:
  • Wrongful denial or improper change in benefits
  • Error or omission in plan administration
  • Improper advice or counsel
  • Failure to administer the plan according to plan documents
  • Conflicts of interest and prohibited transactions
  • Imprudent investment of assets or lack of investment diversity
  • Imprudent selection and failure to monitor third-party service providers
• Automatic coverage for most newly created or acquired plans
• Expanded coverage triggers for pre-claim investigations, interviews and tolling requests may be available for qualified risks
• Coverage for certain penalties and fees levied by the DOL and IRS under a voluntary settlement program, as well as for attendant legal expenses
• Broad definition of ERISA includes equivalent laws established anywhere in the world
• Expanded definition of Loss includes many fines and penalties assessed under ERISA and similar laws
• Broad definition of Wrongful Act including acts, errors or omissions in an Insured’s settlor capacity available for qualified risks
• Potential access to some of the broadest inquiry coverage available on the market, including Interview Coverage for defense costs incurred by an Insured Person when contacted by an Enforcement Unit
• Broad definition of Insured Person includes trustees, directors, officers and employees
• Advancement of defense costs if the organization refuses in writing to indemnify or fails to do so within 60 days of the Insured Person’s written request for indemnification may be available

From top corporate executives that hire investment managers to payroll clerks that process enrollment forms, Fiduciary Liability may be the only coverage that adequately protects people against liability for managing or administering an employee benefit plan.

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Download Chubb’s Fiduciary Liability educational materials to find out more about industry trends, loss scenarios, and frequently asked questions.

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